Winning the Knowledge Game: Smarter Learning for Business Excellence

by Alastair Rylatt  ISBN:0750658096

Butterworth Heinemann © 2003

This book provides practical advice on the strategies, tactics, and systems needed to remain capable and agile in the rapidly changing business world.

Table of Contents

Winning the Knowledge Game—Smarter Learning for Business Excellence

Preface

IntroductionPart One - Opening Hearts and Minds

Chapter 1 - Having a Winning Strategy

Chapter 2 - Building Trust and Support

Chapter 3 - Expanding Your Thinking

Chapter 4 - Faster, Deeper Learning

Chapter 5 - Holding Meaningful ConversationsPart Two - Growing Competitive Advantage

Chapter 6 - Creating a Smarter Business

Chapter 7 - Spreading a Knowledge-Sharing Virus

Chapter 8 - Riding the Waves of Change

Chapter 9 - Sustaining and Keeping Talent

Chapter 10 - Protecting Intellectual Property

Chapter 11 - Leveraging Digital Technology

Chapter 12 - Increasing Customer Loyalty

Chapter 13 - Polishing Your Training PerformancePart Three - Ensuring Lasting Success

Chapter 14 - Evaluating Your Results

Chapter 15 - Measuring Your Know-How

Chapter 16 - Passing the Final Test

List of Tables

Back Cover

Winning the Knowledge Game: Smarter Learning for Business Excellence provides practical advice on the strategies, tactics and systems you need to remain capable and agile in this rapidly changing business world.

To help you meet this challenge, Winning the Knowledge Game explores three questions:

How do you open the hearts and minds of people to smarter learning?

How do you grow competitive advantage?

How do you sustain and ensure lasting success?

All managers need to learn the skill of acquiring and putting knowledge to work if they are to be successful. Most of all they need to learn how to play the knowledge game every day of their life.

The book focuses on the thinking and attitudes required to remain knowledgeable, competitive and high performing.

About the Author

Alastair Rylatt is internationally acknowledged as an expert trainer, strategist and award-winning author in the fields of workplace learning, advanced training skills and change management. A frequent speaker at international conferences, he has worked as a consultant to over 200 organizations worldwide.

Winning the Knowledge Game—Smarter Learning for Business ExcellenceAlastair Rylatt

Butterworth-Heinemann An imprint of Elsevier Linacre House, Jordan Hill, Oxford OX2 8DP

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First published 2003

Copyright © 2003, Alastair Rylatt. All rights reserved

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ISBN 0 7506 5809 6

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To a World of Greater Compassion, Insight and Shared Advantage

Preface Wonderful learning and innovation rarely happen by chance. Whether you are in a business or learning for yourself, you need the right game plan to succeed. Sometimes luck may come your way but, more often than not, it is your perseverance and smart thinking that will win the day.

The benefits of winning with knowledge can be far reaching, ranging from obvious gains such as higher profitability and improved performance through to other outcomes such as improved adaptability, better levels of service and contribution to customers and society.

As a corporate consultant, speaker and manager for over twenty years I have seen compelling evidence that the best formula for lasting, smarter, better business is clearly linked to how well we position our knowledge and build on each other’s genius. In business, as in life, managers need to acquire a diverse and often complex range of skills to succeed. This message is particularly true to the challenge of winning the knowledge game.

People now live and operate in a business world where comparison, learning and competition play an essential part. Whether you are a small business selling fruit and vegetables or a manager making sense of the latest advances in technology, such awareness and insight is vital. It seems that every manager is now being judged on his or her level of know-how. In today’s modern workplace there is nowhere to escape the need for knowledge. How fast we develop our capability and learning is the only formula that matters.

One of the great dilemmas of modern business is being fooled that you are learning smarter when you are using the latest palm-top or killer software application. The reality is that such tools and technologies are no guarantee that you are learning what you need to know.

The goal of this book is to pull together the very best of advice and help your business or career improve. It is my experience that most managers struggle to have the right conversation they need to help move them forward. They are often caught in a silo of similar thinking people or feel they do not have the time or willpower to question their own assumptions and experience. As a result, protection of one’s territory, identity and expertise takes precedence over building a higher level of know-how.

What makes this challenge difficult is that our talent can often be hard to see as the genius that creates breakthroughs, ideas and innovation lies hidden in a clever design such as a microchip, a jingle or a new patent or simple procedure. Such cleverness needs to be drawn out if we are to succeed. To win the knowledge game we must be prepared to live and learn off talent and encourage others to do the same. The benefits are plain to see, whether it is the freshness and taste of a meal, the quality of advice you receive from a lawyer, or how important you feel when you first arrive at a hotel. Our knowledge and capabilities make the huge difference in how businesses and their customers perform and it must be nurtured and treasured. The fact is it is not how big our bank balance is but how we grow our imagination, enterprise and skill that matters most.

Throughout life, each person needs to perfect their own unique formula to find the tools, technologies and know-how they need to grow and develop. Most likely the people who

will succeed will be those who nurture and build their capabilities on a regular and continuous basis.

Knowledge by its very nature is impermanent. What may one day seem ground-breaking and helpful may not be so the next. Learning is not something that can be bottled and kept forever but is a living process full of twists, turns and new discoveries. The key is to see each moment in life as an opportunity to discover new insights, ideas and wisdom. With this attitude the formula for winning the knowledge game is almost guaranteed.

To help you achieve this goal this book will provide the tips and knowledge you need to modify or improve your current approach. To do this, you will find out very quickly that this book gives you easy access to many fields including law, psychology, technology, management, marketing and accounting. The result being a stand-alone resource full of great tips, checklists and practical action.

Although the primary target audience for this book is managers, I do expect a host of other businesspeople to benefit. These include senior executives, team leaders, small business operators, trainers, human resource professionals, IT specialists, intellectual property advisers, librarians, school principals, academics and students.

My biggest wish is that this book will help stimulate much higher levels of implementation and innovation in business and industry through smarter teamwork, collaboration and sharing of insight. We must all discover smarter ways to build better customer relationships, reputation and service delivery.

Most people understand that to have smarter, better business we need to improve the spirit of learning, innovation and enlightenment in what they do. Winning the knowledge game is the path to success in the twenty-first century marketplace and that means investing in our brains, ingenuity and know-how.

Alastair Rylatt Director, Alastair Rylatt Consulting www.alastairrylatt.com

Acknowledgements

I have been lucky to have travelled to most corners of the globe and observed much about how people share ideas and put knowledge to work. In recent years several of my clients such as Roche Products, CSIRO, Office of State Revenue, St George Bank, Parramatta City Council, Vodafone, Gradipore and City of Sydney Council have helped shape my thinking.

On an individual level, Rudi Weber, Cec Pedersen, Karl Erik Sveiby, Rodney Gray, Glenn Capelli, Robert van der Spek, Dr Harrison Owen, Laurel Draffen, Goran Carstedt, Robyn Hutchinson, Elliot Massie, Dr Ronald Forbes, Professor Chris Hall, Peter Williams, Robyn Kramer, James Davidson, Pamela Dodd and Greg Schmidt have all been a wonderful support or inspiration to me on this journey. I would like to thank my wonderful wife Elaine, Selby and my brothers, Andrew, Dennis and Philip and of course my mother.

For me personally this book has provided me with another exciting opportunity to develop my understanding on what it takes to improve the spirit of learning, innovation and enlightenment in business. So thank you all for this great opportunity to learn yet again.

About the author

Alastair who was born in Scotland is one of Australia’s leading contemporary thinkers in modern business management and workplace learning. Alastair’s mission is to inspire the spirit of learning, enlightenment and innovation in business. He is an inspiring presenter, expert strategist and award-winning author. His presenting and writing has taken him to major conferences and clients throughout the world.

Alastair holds a Bachelor of Business Degree, Graduate Diploma of Employment Relations. Alastair is also a fellow of the Australian Institute of Training and Development and an Associate Fellow of the Australian Human Resources Institute.

Alastair has written a number of other books including Learning Unlimited, Navigating the Frenzied World of Work and Creating Training Miracles. Creating Training Miracles, which he co-wrote with Kevin Lohan, won the Best Business Book for Asia Pacific in the Financial Times/ Booz Allen and Hamilton Awards as well as reaching the global final in London in 1996.

Alastair has consulted to over 200 organizations in a vast array of industries and businesses over fifteen years. Clients include the Australian Institute of Management, City of Sydney Council, Coca-Cola, General Sekiyu KK(Japan), Roche Products and Singapore Institute for Management and Vodafone to name a few.

Alastair Rylatt, the director of Alastair Rylatt Consulting, can be contacted at alastair@alastairrylatt.com or visit his Workplace Learning Help Desk at www.alastairrylatt.com

Introduction

The knowledge game

Learning through knowledge should be no stranger to us. We have accomplished this playing games as children or in perfecting new skills later in life. Business, like life, is full of countless opportunities for us to build our capacity, agility and expertise. To a very large extent business success is determined by how well we play these knowledge games and how well we understand the dynamics of being human.

Whether we are at home or work winning the knowledge game is a skill we cannot ignore. Irrespective of whether you like or dislike the games people play, it is very difficult to remain detached and unaffected by the fact that you will need to interact and learn with each other to solve life’s challenges.

To be successful contemporary business needs a knowledge game plan. Managers must encourage a business culture where ideas and talent can be built without unnecessary obstruction and interference. Knowledge is not something that you can manage or box. It often has a personality all of its own, where it can grow, fade away and change without warning. As a result, managers need to be wary of exerting too much control and command and be more tolerant of teamwork, collaboration and sharing.

More often than not it is our capacity to inspire imagination, foster talent and put knowledge to work that makes us stand apart from other businesses. As Laurence Prusak, an international authority on knowledge and innovation, says – the only thing that gives an organization a competitive edge – the only thing that is sustainable – is what it knows; how it uses what it knows; and how fast it can know something new.

As life has taught us, knowledge games by themselves do not necessarily generate benefits. We need to approach them with purpose, rules and intentions to reap the rewards. We have to be confident that we are deploying the right tactics and methods. Here are seven rules that have helped me play and succeed in games in the past and I believe these have direct application to the world of business. To be successful in winning with knowledge we must:

be clear with what and why you are playing

understand the game’s rules, objectives and conditions

inspire oneself and others to put in their best effort

where possible, have a game plan which builds on shared goals

learn as you go and position your knowledge

evaluate and compare your progress and revise your strategy

go back and apply what you have learnt for next time.

Of course these rules are no miracle cure. You must be prepared to stimulate fertile ground for innovation and performance improvement by searching out new insights,

securing strong relationships and being courageous enough to build a plan of action.

In some cases your goal in winning the knowledge game may be about becoming the best, the first or even the largest. While on other occasions you may be quite happy to build on the ideas of others and quietly innovate. Winning the knowledge game in business need not be played using a win/lose scenario. Increasingly, leading organizations find that pooling expertise, even amongst traditional competitors, is smart business. By doing so you raise the chance that everyone can win in an ever-changing world. Alternatively, your focus may be around the theme of greater contribution to society or enhancing customer value. Whatever your position or intention in business each manager needs to respond smartly with the right tactic, tool or system in order to succeed. Particularly when we consider that often we do not know who is going to be our next critic, competitor or customer.

Playing with integrity

As you would expect ethics are vitally important to how you play the knowledge game in business. The chances for a manager to be unethical or unlawful when it comes to collecting, storing and acting on knowledge and intellectual property are enormous. In many situations people may be unaware that what they are doing could be deemed unlawful or unethical. For example, eavesdropping into a conversation between people from a competing business at an airport lounge. Would you call that unethical? Some people would say it is fair while others would not agree. Such enquiry is central to how we play the knowledge game.

For many executives and managers winning the knowledge game is like fighting a war. That is winning at any cost! They feel any action or business practice is acceptable, as long as you defeat the enemy. When I was discussing possible titles for this book, one publisher suggested Winning the Knowledge War. I felt for many reasons, one being how the world has changed since September 11th, that the war title was an untimely and bad taste choice. In war the rules are dramatically different. Espionage, misrepresentation, piracy, theft, bribery and covert surveillance are seen as fair game. I would argue this should not be the case in business, but I know many people would disagree with me.

It is my view that winning in business can and should be undertaken in a more enlightened and transparent way. Sure you may need to deploy counterintelligence measures but this can be done in a spirit of fair play and the utmost integrity. We can create a business model that sees the game of knowledge as an exciting opportunity to achieve excellence and improve performance without resorting to unethical tricks or foulplay. Most likely you will need a risk management strategy that helps protect your rights and know-how and that may mean taking direct legal action, safeguarding trade secrets or protecting intellectual property.

To help you build your own strategy for winning the knowledge game you may find the code of conduct of the Society of Competitive Intelligence Professionals (SCIP) at http://www.scip.org a useful starting point.

SCIP suggests that you should consider the following:

Continually strive to increase the ethical use of competitive intelligence.

Comply with all applicable laws, domestic and international.

Accurately disclose all relevant information including one’s identity and organization, prior to all interviews.

Fully respect all requests for confidentiality of information.

Avoid conflicts of interest in fulfilling one’s duties.

Provide honest and realistic recommendations and conclusions in the execution of one’s duties.

Promote this code of ethics within one’s company, with third-party contractors and within the entire profession.

Faithfully adhere to and abide by one’s company policies, objectives, and guidelines.

Without doubt integrity when it is displayed is a quality that is priceless. Particularly when excessive greed, golden handshakes and backroom deals are now getting more and more media attention and community backlash. The truth is that we may not be able to control the behaviour of others, but you can still be a leader of integrity and transparency. One simple way of testing your behaviour and choices is to consider the following scenario.

How would you feel if what you are proposing to do, is reported on a national current affairs programme? If you feel uncomfortable about how your intentions or dealings may be reported it is most likely that your actions may be considered either unlawful and/or unethical. This simple ‘gut test’ is a useful guide to help you travel in the murky ground of competitive intelligence and ethical behaviour.

Structure of this book

Having introduced the theme of winning the knowledge game and the importance of integrity let us now explore what you see in the upcoming chapters.

First of all, explores three fundamental questions. In answering and exploring these questions you will be able to implement and sustain action in any business or career. These are:

How do we open our hearts and minds to learn smarter?

How do we grow competitive advantage?

How do we sustain lasting success?

Let us explore each of these three areas briefly and highlight what you can expect.

Opening hearts and minds

Before launching off and implementing systems, changes and tactics in business it is imperative that you engage curiosity and commitment. It is here where most managers and change processes go wrong. To win the knowledge game you must first open people ’s hearts and minds to learning. Avoid making the common mistake of jumping into action before you gain the support of people. During the first five chapters this book will explore a number of issues including: starting with a winning strategy, building trust, smarter thinking and learning and finally nurturing meaningful conversation. It is recommended that you either read or skim through this first section before jumping ahead. It is my experience that most of the problems in winning the knowledge game result from failing to do the basics right and they are included in this first part.

Growing competitive advantage

Here moves towards answering the second key question of how do we grow competitive advantage? Here you will discover the latest tools, techniques and best practice approaches to improving your know-how, innovation and performance. Over eight chapters you will explore a diverse range of topics ranging from smart leadership, competitive intelligence, nurturing the change, better talent management, protection of your intellectual property, reaping the benefits of digital technology, increasing customer loyalty and polishing your training performance. The goal of this second section is to help you to custom design your own personal and unique approach to knowledge and innovation in your business and career.

Ensuring lasting success

This book ends with three chapters on the vital themes of evaluation, measurement and on-going success. Here the primary focus is to help you place value and measure know-how, genius and insight. This will be discussed in Chapters 14 and 15. Then, in the final chapter on passing the ultimate test, we highlight seven major themes which surfaced for me as I wrote this book, as well as providing some concluding tips on better managing our thinking and brain power.

In conclusion, to help you get the best out of this book, each chapter contains short pieces of insight rather than long-winded explanations. Checklists, examples and summaries are extensively used to make the application and choices easier. At the beginning of each chapter you will find five discoveries and at the end a short summary. In the final part of the book there is a comprehensive reference section which includes extensive web references.

May you enjoy the thrills and spills of winning the knowledge game for many years to come!

Part One: Opening Hearts and Minds Chapter List

Chapter 1: Having a Winning Strategy

Chapter 2: Building Trust and Support

Chapter 3: Expanding Your Thinking

Chapter 4: Faster, Deeper Learning

Chapter 5: Holding Meaningful Conversations

Inspiring higher levels of curiosity and imagination is the major foundation for winning the knowledge game. Managers must spend their time and effort winning over the hearts and minds of people to the shared importance of building a smarter and more agile business.

There are a number of capabilities that help this pursuit. They include building a culture of discovery and innovation, sponsoring higher levels of trust and support, exploring new ways of expanding your thinking, combining faster and deeper levels of learning and, finally, being prepared to freshen up your collaboration, teamwork and relationships.

These principles are common to all forms of human interaction whether you are managing a large organization, a small business professional, or working for a not-for-profit organization. These are the life skills for twenty-first century business and personal growth.

Chapter 1: Having a Winning Strategy

Overview

You cannot schedule creativity . . . We don’t know what is going to be a good idea, but we do know that to have good ideas, we have to have ideas – the good, bad and the ugly. We must empower individuals to pursue his or her dream to help the good ideas survive.

(Dr Geoffrey Nicholson)

Having a winning strategy requires:

knowing your business and positioning your knowledge

creating safe space for people to toss around ideas

stomping out bullying, the hoarding of information and back-stabbing

encouraging people to be intelligent together

making it very clear why sharing is important.

Getting the basics right

Let us begin by asking two simple questions: what makes a truly outstanding business? What capabilities does a business generate that makes it extraordinary and very hard to copy?

These two questions are at the core of winning the knowledge game. Outstanding business performance begins and ends with the enduring ability to know your marketplace, position your knowledge and build your capability. No industry or business can ignore the fact that it must tailor its products and services to an increasingly sophisticated and aware audience, community and/or customer base. The better businesses are very clearly aware of their purpose and have built a compelling vision for the future and created a practical plan to get there.

As one reads literature, hears stories and observes practices you can quickly get a real sense that know-how is the critical difference. When done correctly, learning and knowledge is transformational and ground-breaking.

Whatever your trade, profession or passion, putting knowledge to work is central to everything you do. There is no job or business that can ignore the fact that wisdom and higher levels of insight will set you apart from the rest. As Thomas Stewart said in his book the Wealth of Knowledge: ‘Knowledge is a rock.’ Uniqueness particularly unique knowledge is where business wins or loses.

Here are seven examples that will give you a feel of better practices in knowledge and innovation in a variety of industries:

BMO Financial Group increased their capacity to attract and keep customers while also improving profitability by developing a data warehouse of customer information and preferences. The pilot implementation saved the bank an estimated US$22.8 million through reorganizing product lines and creating more targeted marketing campaigns.

Celera-Genomics estimated it would take two years to determine the structure and sequence of the 3 billion chemical base pairs that make up human DNA. Using 300 specially developed DNA sequencing robots at a cost of US$300,000 each and the most powerful supercomputer in the private sector, Celera Genomics began sequencing the human genome and were able to publish the results well ahead of the two-year expected time frame.

Ford Motors introduced a knowledge exchange between thirty-seven plants around the globe to reduce the time it took from the concept of a car to it being in the marketplace. On the latest count 2800 proven practices were shared and the production cycle has been reduced from thirty-six months to twenty-four and the value of improvements are estimated at US$1.25 billion.

John Paul College, with the assistance of notebook computers, wireless networks and on-line learning technology, has become one of the largest schools in Queensland, Australia. Its vision of pioneering ‘anywhere anytime’ education has led to the establishment of a connected learning community involving collaboration with student teachers, parents and the wider community in learning and education.

The Lgov NSW learning team began using web cams to mentor, coach and give supplement skills training to managers in remote country and city locations. The result is a higher level of learning and skill development for managers.

Parramatta City Council, as a result of a management initiative, established five cross-functional teams to explore better ways to improve organizational capability in 2003. As a result, new policies, systems and protocols were established and action plans agreed.

In 1996 the new president of the World Bank declared that the bank would strive to become the ‘knowledge bank’. Each staff member now devotes two weeks per year to knowledge creation, sharing and learning. Staff now participate in over 100 different discussion forums to create and share knowledge in key areas such as early childhood development, school health and disaster relief.

As you read these citations of varying complexity and size, it is easy to see that the potential and terrain for improving knowledge work and innovation is immense. As you would expect, there are many factors that help create business value, such as new enhancements in technology, better customer service, patenting a new product or the ability to cut transaction or production costs. These capabilities cut across the fabric of what drives outstanding business in most modern industries and occupations. With the right attitude and thinking, solid progress can be made.

So what generates a successful strategy? Generally, there needs to be a business leadership that nurtures trial and error as well as a never-ending commitment to ingenuity and discovery. There is a clear realization that winning the knowledge game has no miracle solutions and quick-fix answers. You need to be in the game for the long haul. Such intention and spirit is essential before you can expect to reap the rewards. You need to accept that often there will be a slowdown in productivity and service before the benefits of learning can begin to sink in. This can be seen in training courses where people need time to develop their expertise and practice before you can see positive change.

Assuming you have the basic attitudes right, you will need to work hard to stay in the knowledge zone. In this regard businesses must, first, lead from the top to engender a corporate culture of never-ending improvement. All the techniques, tools and technologies in the world will not make a scrap of difference if the heart of the business fails to champion daily innovation and continuous improvement. Being quietly comfortable and thinking that things can cruise along is a proven recipe for decline or stagnation. We must be prepared to look for new and better ways to improve. Second, you need to be receptive to unlearn what you know, while also being open to discovering what we do not know. It is vitally important that we test our assumptions, myths and taboos. In this fast-paced world it is very easy to miss the blatantly obvious, so we must work hard to keep our antennae and radar up. Business must be prepared to move beyond just doing tasks and completing projects, and be prepared to note the learning that comes from experience. Life is a great teacher if only we take the trouble to learn the lessons that it provides us. At times managing such dynamics can be disturbing, unsettling and uncomfortable. Each business needs to feed off chaos, uncertainty and expediency to uncover what is most necessary and important.

To sum up, better practices in knowledge and innovation display a clear understanding of five guiding principles:

To be successful one must create a clear and inspiring vision for change, thereby assisting people to clearly understand why better knowledge is vital and why it is deeply important to everyone involved.

Leaders need to stimulate a spirit of collaboration and mutual advantage by sharing what they know, while learning what they do not. They realize that knowledge cannot be conscripted or forced; it must be volunteered and encouraged.

Knowledge work is essentially a social experience. It needs exchange and interaction. Digital technology, tools and systems are a great help, but you need people for it to work.

Knowledge is not about which talent you hire or intellectual property you own, it is about how well you stimulate the flow of ideas. Without open and frank exchange you will fail to get the depth of insight you need.

Knowledge work is not about flooding people with information, but is about creating greater value for your business, its people, your customers and society.

Watching our blind spots

No week can pass without us sighting an example of a business that has closed or is obviously struggling. Whether it is a government organization like a local council or an insurance giant who has negated its obligations to its shareholders and customers, the examples are endless. The fact is, businesses do not have a great track record of adapting to change.

Of course, it is not just the medium to large organizations that struggle in winning the knowledge game; small businesses struggle as well. Just think about your local shops, restaurant or industrial precinct and count how many businesses have changed in the last twelve months. Each business no doubt would have a story to tell. In most cases, although they may not wish to admit it, absence of know-how or being blind to impending change may be the root cause.

A close family friend is a very successful artist who runs an art gallery in an inner city area. He recently told me this story of his attempt to build on the business but devote more time to painting. To do this he appointed a full-time gallery manager to manage the retail side of the business. In time he became curious that given the high turnover of artwork the profitability of the business did not seem to be improving. He asked his accountant to have a closer look at the daily transactions. To his horror he discovered that over $40 000 went missing in a classic white-collar crime. Needless to say, when confronted the gallery manager left without a trace. My friend immediately recruited a new gallery manager but this time better checks and procedures, including daily reporting of transactions and regular conversations on building the potential of the business, were employed. Together the working relationship has much more potential for success. Blind spots such as these are notoriously common in businesses.

But blind spots may not always result in direct financial losses. The outcome could be lost or unfulfilled potential because the talent and capabilities of people are lying dormant or hidden. Organizations such as Honeywell, Microsoft, Body Shop, Lend Lease Corporation, Ernst and Young and Buckman Laboratories are companies that have a track record of investing in their people by building systems that nurture and develop a winning strategy. The result is a much quicker response rate, higher agility and adaptability to the customer.

The key to overcoming blind spots is first to recognize the danger of overconfidence and arrogance by encouraging greater honesty, disclosure and transparency. As Bill Catucci from AT & T in Canada says, ‘In the past, the person reporting an unfavourable number was lonely and isolated. Now, I want people to admit to shortfalls and have everyone else respond, “How can we help?” This is an entirely new management model for the company.’

In this new model of leadership managers must support a different code of behaviours. First, they must set up safe spaces in the business for people to have deep conversations on issues that they feel passionate about. This must be done without them being constrained by hierarchy, ego and status. People must feel safe to be able to share their frustration, explore unresolved issues and dig for the truth. These exchanges must be undertaken in an environment of humility and humbleness. Trying to look smart or fine is not a formula for winning the knowledge game.

Second, people must be prepared to coach and facilitate rather than trying to be the star. From experience, managers can be both a friend and a foe when it comes to finding smarter solutions. For example, a government client of mine had a serious backlog of requests for a new home loan initiative. When I was called in to help it became obvious very quickly that much of the initiative of the team was being stomped on by a highly motivated manager. At the initial meeting when another member of the team raised a possible solution the manager quickly discredited it, thereby killing off any flow of ideas. It was obvious that the current dynamics could not continue. On this occasion we took the pressure off this person, a subject matter expert, by asking the person to be a coach rather than a judge. The good news was that the manager played their new role beautifully and all of a sudden new natural leaders and problem-solvers emerged. Within a short time the backlog problem was solved.

Finally, business must be prepared to broaden its view of the world and marketplace, and be more receptive to explore the unknown or, even, the unspeakable. One of my most vivid memories of a blind spot was a consulting project I undertook at the Australian Navy Supply Centre in Sydney. In the early 1990s I was asked to conduct a series of managing change training programmes. At the time there was strong rumour that the head office would soon be closed down, privatized or relocated. When I raised this scenario at the site many of the managers and team leaders saw it as totally unrealistic. They labelled it ‘consultant spook’. Their view of reality was very different. They said, ‘why would the government touch something that is not broke?’ Well only a few years later the unthinkable happened. The operation was relocated to other sites throughout Australia and many of the staff took redundancy packages. Now, where many large warehouses and offices once stood is a large open space being converted to an apartment complex. For me the greatest lesson in this experience was the importance of thinking outside the square as often as possible.

Drawing on your courage

Make no mistake, if you wish to win the knowledge game you and your business will need plenty of courage. ‘Why?’, you might say. Well, often it requires you to change or address taboos and ingrained injustice, unfairness and poor performance.

Specifically, there needs to be a strong stand to stomp out those behaviours that kill off initiative, innovation and free expression of ideas. This typically requires us to identify and correct behaviours such as the hoarding of knowledge, back-stabbing and bullying, backing it up with comprehensive self-improvement plans. Unfortunately, this is a tough task when many businesses have turned such unsavoury behaviours into an art form. For example, a 2001 study by the Australian Council of Trade Unions, found that 70 per cent of managers and supervisors had bullied their workers and in only 18 per cent of cases was anything done about it. A similar study by Manchester University in the UK found that over 90 per cent of respondents thought that bullies got away with their behaviour.

It was not long ago that I presented the idea of courage at a management conference. After ending my presentation, one of the participants said to me: ‘Alastair, I was really interested in what you had to say about courage. The fact is in my organization, people get beaten up for showing courage.’ I responded by saying: ‘Yes you are right, but the leaders need to say we are not prepared to allow this any more. If no change occurs the epidemic will continue.’

Over the past twenty years I have seen the lack of courage and business leadership raising its ugly head time and time again. Businesses and their managers often struggle to progress because their people feel alienated, undervalued and bullied. Needless to say, they are losing the knowledge game as well as business and their reputation at the same time.

To redress bad behaviours there needs to be a commitment at several levels. It must start with clear evidence that the old way of managing is not only not required but is counterproductive. My experience is that, if people are given the support, permission and training to act differently, they can make the necessary changes. In some of the more difficult cases, people will need a detailed performance improvement plan before real change can be observed. Even then, their ego may stop them from progressing. However, in most situations, if the process of improvement is approached in a positive way, success will result.

Most of all, waiting for things to settle down rarely works. Managers need to support those people who have felt alienated or hurt by past decisions or inaction. Whatever the history, we need to take the lead and plant a new course of action. Whether it is scheduling a face-to-face meeting or going out to lunch, we must undertake a new and fresh approach to communication on a regular basis.

Letting go of control

Growing our knowledge requires strong healthy relationships that help expand our thinking. We must listen to fresh ideas, meet different faces and find new connections.

We can no longer support a world where bosses rule blindly and where people ‘leave their brains at home’. Each day we are expected to find new answers to new situations and this requires a better mix of thinking and collaboration.

This will often mean people talking and connecting with others who are outside their immediate work function, like establishing cross-functional teams or establishing a regular time for a wide range of people to discuss an issue of concern. For many, this means less emphasis on control and command and more on encouraging new interactions across and through the business.

If you view knowledge as a prized possession which must be controlled and monitored, you will struggle in maintaining the energy and drive for innovation and business improvement. You will most likely be faced with high staff turnover or, worse still, a team that never contributes. Conversely, if you see knowledge as something that is in constant transition, needing to be questioned, tested and discussed, the outcome will be radically different. You will build a business culture that will be full of enterprise, promise and ideas, a business environment where people are encouraged to be helpful to each other and one free of fear and retribution.

In this regard simple changes of leadership style can make a world of difference and difficult situations often can be recovered. However, if someone has lived his or her career and life hoarding knowledge and being a controlling boss, making a transition to a more inclusive approach will not be easy.

You can help a person to change by providing constructive feedback that you have serious concerns about their career, lifestyle and health if they do not take action. Such support and concern can often work wonders, particularly if you back this up with real help and tools to make the new learning and performance improvement possible.

Championing greater sharing

The final part of building a winning strategy to knowledge and innovation is about creating an environment where sharing happens naturally. When this begins to occur you are well on the way to winning the knowledge game.

The better leaders in business use a range of tactics, to help champion greater sharing. At a practical level it could include the following behaviours:

Keep your requests nice and simple.

Make it clear why sharing and exchange is important.

Ask of others what you would be prepared to do yourself.

Anticipate awkward situations in advance.

Start with safe and easy matters, then move to more sensitive and challenging issues

Always offer to help them in return.

Thank people for their involvement whatever the outcome or contribution.

Developing this skill is vitally important given that, more likely than not, the person you wish to share with will have no formal reporting relationship with you. This is increasingly the case in modern business where people are working with many people in a complex web of relationships and reporting channels cross time and place. It is not uncommon for people to have four or five people to whom they report in any given day. In these situations we have to work extra hard to gain their commitment and trust before we can expect anything in return.

Here the primary goal is to encourage open sharing, irrespective of hierarchy, status or background, so that where people wish to share it is very difficult for them to miss out. Also there is a clear recognition that sharing can take time and effort. So a little administrative support then rewarding contributors and giving social credit can help sway the balance in your favour.

In saying this, we do need to see the difference between just chatting aimlessly and exploring what matters. People often say to me, ‘we do knowledge sharing we have meetings’. From years of observation, such gatherings only go through the motions. They are full of tightly controlled agendas, assumptions that have not been discussed and never to be revealed viewpoints. The fact is that when you experience knowledge sharing at its best you can certainly feel the difference because it is full of excellent dialogue, commitment and a desire to take responsibility.

Again we need to champion the cause of winning the knowledge game by first being prepared to open hearts and minds. If our personal behaviour is at odds with what we expect of others, we can hardly expect others to assist. See it as your personal goal to be a role model of greater collaboration, networking and celebration of knowing. Coach people to take responsibility for what they are passionate about. Encourage people to discover and learn together. Be generous with your knowledge.

Summary

To be truly successful in putting knowledge to work you need to give a clear focus, engage motivation and build the right systems. We need to be aware of biases, our blind spots and beliefs, and be courageous enough to discover what we do not know. You must be prepared to let go of control and command, and sponsor a two-way flow between a wide range of people. Taking an expansive attitude will change your life and help you to win through better know-how and insight.

Chapter 2: Building Trust and Support

Overview

When the spirit of people is strong, focused, and vibrant wonderful things begin to happen.

(Harrison Owen)

Building trust and support requires:

respect and appreciation

different networks, connections and friendships

procedural fairness and transparency

awareness of our trust levels

relapses as part of personal growth.

Sponsoring greater partnering

The undeniable fact is that building knowledge requires trust. Whether it is employees making new plans, or a consortium of companies teaming together for a new venture, there must be a degree of cohesion and openness before you can expect the desired rewards. Without trust, the potential for innovation and discovery becomes very limited. All the words and intentions in the world will not make a scrap of difference if it is not backed up with a genuine desire to share ideas, feelings and plans.

The list of trust-building behaviours can appear quite overwhelming at times, so it is important to keep them as simple as possible. Recognize that the journey is not an easy one and that there will be moments of contradiction and ambiguity along the way. So be prepared to dust off some old bad habits and give it a try.

To help you build a higher potential for opening hearts and minds to knowledge-sharing experiences, here are five cornerstones of trust that can assist you achieve this aim:

Where possible, seek out opportunities for higher levels of trust by facing up to your responsibility to raise issues of concern and happiness along the way, while avoiding premature judgements based on incorrect assumptions or conclusions. Be prepared to forgive, show concern and demonstrate compassion.

Take the time to establish the ground rules on how knowledge sharing may work in practice. Simply asking what the other party desires and expects in an exchange can make a world of difference.

Trust is built on competence; be a manager who is prepared to build and foster openness, transparency and frank exchange. Ensure promises are backed up with mutually agreed actions. Take the time and effort to jointly celebrate discoveries, insights and adventures. Avoid like the plague any behaviours that reduce trust, such as talking behind people’s backs or failing to deliver as agreed.

If you are not happy in a relationship or exchange be prepared to say so. Wasting time and energy when you are not happy will not serve anyone’s interest. Clarify what can be delivered. Do not get angry, just get clear!

When the exchange is not working, ask for feedback on what you can do more or less of, to stimulate the relationship. If you find that you cannot meet expectations or it is simply not the right time, say thanks, and move on. Do not lay blame. There are many other people you can be relating to, so get on with it.

Making solid progress in trust often requires us to clear emotional baggage that may be limiting us from operating in a greater zone of intimacy. We must be prepared to clear beliefs, uncertainties and any pain that may be holding us back from fully trusting or being open. If we want to build new high-trust relationships it is quite likely we will need to revisit a long list of memories, some painful and some joyful. Typically, these ghosts from the past could be those involving us being let down and being hurt, while the joyful moments could include wonderful moments of high team spirit, exchange and innovation. So, to build trust we need to recognize that clearing our past is a major determinant of us moving forward.

The reality is that trust is rarely high. People are naturally cautious; they need proof that disclosure is safe and what you learn will not be used inappropriately. For trust to exist there must be high levels of rapport and reciprocal exchange, and in most situations that does not exist. We are therefore left with the unfortunate reality that we have to do the best we can with the trust we have been given. Then, assuming you are able to spark a positive exchange, what will a person choose to share? Will they do enough to just get rid of you, or will they actively want to help you? Even then, is the information you receive relevant and will you act on it, or will the knowledge you receive be filtered to such an extent that it will be worthless? Alternatively, they just may not know or be unable to share what they know. The pearl of wisdom we need is often locked way in the mind and nobody can access it. Such questions are integral to the skill of building trust and can only be resolved by having close and intimate conversations with people over time.

Of course, having long and intimate conversations is becoming more difficult in a world dominated by e-mail, the telephone and text messages. Somehow we need to step out of the busyness of modern living and make sure we rekindle deeper relationships with key contacts and other people as often as we can, whether it is over lunch or contacting someone once a month for a longer and more informal chat. For trust to blossom, you must be prepared to build a spirit of belonging which goes further than just the job or the area of discussion. Taking the extra trouble to express your wishes and intentions will dramatically improve the capacity for a high-trust relationship to be maintained. In some cases some people may not wish to partner with you and that is fine; we need to see that as understandable. Instead of becoming frustrated by people who do not wish to partner, we should react by seeing this as perfectly normal. There needs to be a deeper understanding of what is allowable and permissible. The key in long-term business relationships is shared advantage and partnering.

Reviewing your inner circle

You only need to ask people how they acquire knowledge, to quickly understand how often they rely on a few trusted friends to get the answer. For example, if you decide to buy a new home entertainment system do you unconditionally accept what you first see, read or hear, or do you ask a few trusted people for their opinion? The answer, I am sure, is that you would most likely place much more value on what a trusted friend or adviser says rather than relying totally on the advice of someone unknown to you.

This trait of the web of human connection has profound implications on our ability to grow and learn. If our network of contacts is either too small or too narrow we will not have the pool of collective wisdom we need to manage the challenges that lie ahead. Needless to say, in what we are facing now it is quite likely that in 90 per cent of cases we may need to go well outside our close circle of friends and advisers to get the answer. However, in reality, due to the personal weighting we give to the value of our connections, we do the opposite, staying with a trusted few to help us solve nearly everything we face.

Of course, changing or expanding our mix of close contacts is not always an easy proposition, particularly given the pressures of time, but we do need to think more creatively about how we can adapt our personal networks and business connections on at least our major business priorities. Unless we make this effort we most likely will be operating in a vacuum.

Having done much of the hard work on improving levels of trust we then need to become skilled in auditing the composition of who is, and should remain, part of your more trusted circle of advisers, mentors or helpers. As discussed, one of the interesting facts about people is that they commonly rely on a very small group of individuals to be their most trusted inner circle. Typically, in business a manager can have up to 150 individuals to whom they turn for advice or information, However, their inner circle can be much smaller. This network of high-trust relationships can include many people, from work colleagues, associates and acquaintances to relatives. It is here that the most intimate knowledge is often shared.

This inner circle of trusted friends is built up over time and we are often quite resistant to changing its composition. ‘Why?’ you might ask. Well, we feel connected emotionally and it is here where we feel most comfortable. In most cases people are very protective of their inner circle, whether it is just habit or because it just feels nice and cosy. For example, reflect on a recent experience where someone has demanded or requested greater time from you. This could be someone who wants to spend more time with you socially. Do you automatically say ‘Yes’, or do you consider the cost of spending more time with that person and less with someone else?

Like many others, changing my inner circle has been, and continues to be, a huge issue. For example, each year I get countless requests from other prospective or actual authors who want to write with me. This is in addition to the many external consultants and contractors who want to be part of my business. Each time I receive these requests, I have to make a decision that evaluates the potential benefit of joint writing or partnering with others. The decisions are rarely easy, but there are times when I have to stretch my comfort zone and change my inner circle based on different circumstances.

Reviewing and changing our inner circle is particularly important given the changing nature

of work and life. Whereas the issues we are now facing are in constant flux, so should be our network of contacts. How we vary and change our personal networks can have profound implications on our capacity to cope and self-manage. Advances such as the World Wide Web and wireless devices like mobile phones certainly have improved our chances of having a greater mix and diversity of people within our lives. However, the level of intimacy can often suffer, particularly when it involves face-to-face conversations.

Ultimately however, being stuck in a zone of similarly thinking people can help with some challenges but could be quite dangerous with others. This is commonly seen in business, when decision-makers are unable to respond correctly to what is happening. So be prepared to review your connections on a regular basis. This may not be as radical as crossing names out of a personal organizer or diary, but it does mean becoming more aware of the strengths and weaknesses of your existing network of knowledge and being prepared to make the required changes. This is certainly not one of the easiest parts of winning the knowledge game, but it is probably one of the most important.

Securing exchange on a free and fair basis

Developing a spirit of reciprocity and fairness is a very misunderstood area of trust development. Just because an employer hires someone, does not mean they will openly discuss their ideas and freely give their full attention and commitment. People need to feel that the exchange is fair and free. In other words, they must feel that what eventuates will not bleed them dry and leave them feeling vulnerable or unwanted. Deciding not to share is often an indicator that a person does not feel quite right in the existing arrangement, resulting in them not sharing – a much safer option. In many cases, reassurance, education and coaching needs to be backed up with a guarantee of fair treatment so that efforts will be recognized and protected. The benefit of sharing must be greater than the costs.

In business, free and fair treatment is equally important for all forms of employment whether full time, part time or contract. It is also just as important for that one-off request, or pleas for help. Let us say a manager is seeking answers or help from someone who they have never met, or will most likely never meet again. Here again the manager must guarantee that what is learnt will be used fairly and the source will be recognized. That means securing agreement on how the knowledge will be used and how each party will benefit. This is recommended even when the issue of fairness or freedom to act is not raised. It is better to be safe than sorry, and this means not taking things for granted.

This is particularly the case when it comes to more sensitive matters such as protecting intellectual property and trade secrets. Even if other people do not ask for such guarantees, you need to ensure the appropriate level of respect, appreciation and support is observed. In practice, this means creating trust-forming relationships where both parties feel, hear and see the benefit in the exchange, thereby ensuring that what is shared or given will be somehow acknowledged in full. Then, if permission is given, the original contributor is acknowledged. This practice, where original idea creators are credited for their thinking, not only builds public standing of excellence, but also provides a powerful message that their wisdom and insight is fully appreciated and valued.

Securing a fair process means creating procedures that reward the sharing of knowledge. Tangibly this would mean rewarding people who sponsor free exchange of knowledge, such as coaches, innovators and mentors. This may mean some monetary remuneration but more often than not it has nothing to do with salary. People want to see that ideas are used with integrity and credit.

Other strategies regularly used in business include rewarding the best sharers and coaches by making them part of privileged gatherings such as think tanks at residential venues, or study groups or by including them in future succession plans. Needless to say, people who intentionally steal other people’s ideas are scorned. What is encouraged is building a network of people who praise and celebrate inventiveness, creativity and application.

Working at your highest level of trust

To build rapport and openness it is important to work at the highest level of trust in which you can. Stuart Wells discusses four levels of trust which provide a useful framework to build the relationships you need to win the knowledge game.

Starting with negotiated, which is the lowest level of trust, we progress through conditional , then co-operative and, finally, to the highest which is unconditional . The premise behind this framework is that you can evolve to a higher level of trust at any time if both parties are prepared to partner at that level. Let me make a brief comment about each.

Negotiated trust is when an exchange of trust is at its lowest. Here both parties only act on those matters which have been clearly agreed to.

Detailed actions and milestones would be a central part of this agreement. This is often seen in early discussions between untrusting parties.

The next level of trust is conditional. In this context people work on the assumption that the other party will get the benefit of your doubt until you see how they perform. If they do well or they meet your expectations you will trust them more. Here you are setting up an often unspecified probation period for the other party to prove their worth and trustworthiness. This is a little more liberating and freewheeling than the negotiated level of trust.

Third is co-operative trust which works on the belief that if a party fails to meet their commitments it does not automatically mean that trust will be eroded. You realize that all parties will sometimes experience difficulties and these will be sorted out. What is more important is building a long-term relationship.

Unconditional trust, the highest level of trust, relies on the deepest integrity and intention of all. Here you are not concerned about the levels of trust, you have moved on to more enlightened perspectives such as bringing about required change, making positive reform and sponsoring innovation. As a result, you begin to spend your energies on getting on with the job rather than checking and balancing the behaviour or performance of the other party. If a situation arises that is not desired, there is enough faith in the parties involved that the problem will be discussed and resolved.

I have found, in applying this model, that one soon discovers that many deeper questions or issues about trust bubble to the surface. For example, in recent times I have pondered on the following questions:

What level of trust am I capable of, when giving or receiving?

What can be done to improve the level of trust and or trustworthiness?

What are the advantages and disadvantages of trusting more?

What are the possible consequences of my current level of trust?

Do the costs of trusting more outweigh the benefits?

Am I displaying the right level of checks and balances?

Responding to relapses

As has already been highlighted, the right level of trust is imperative if we wish to win the knowledge game. However, in saying this, we also need to accept that relapses are a fact of life, whether changing diet, giving up smoking or building trust. ‘Why?’ you might ask. Well, like any habit it often takes many goes before we can perfect the art of the new skill. So instead of seeing relapses as a problem, we should see them as a perfectly normal part of the personal growth process.

So, if you wish to help build trust, spend your time and energy rewarding the desired behaviour and remind people how their world will change if they are successful in cementing a different habit. From experience, it is far better for a manager to give praise and build confidence than lay blame. We need to remind people of why the effort is necessary and encourage them to continue. This also goes for changing our habits as well. We need to be kind to ourselves when we experience relapses and struggle, and prepare to steer ourselves back on course. Where possible we need to learn the lesson of why a relapse may have occurred, stop being angry or frustrated, remind ourselves of our goal and get back on track. It takes a special effort to acknowledge our feelings and to make sure we give ourselves the time and space to take corrective action.

Also we need to understand that building trust can create a win–lose tension, particularly if people feel they are losing power from changing the nature of their personal relationships and how knowledge is shared. This vulnerability is common, especially if a person is used to being an independent contributor or feels that the status of someone else is above or below their own. Most of all, we need to let people know that they are accepted for who they are, and that you want them to be part of a new way of relating. In this way you have a much better chance of building a shared purpose that will stimulate greater levels of commitment and responsibility. The beautiful thing is that when trust exists the process of knowledge and innovation is so much easier.

One technique, which demonstrates many of the qualities of high trust is ‘open space’. Open space is a group technique practised by Harrison Owen, a North American consultant. The open space technique draws on the wisdom of indigenous groups, notably from the village of Balamah in Western Africa, the Native American tradition and the Far East. Owen shows how a simple group process can be used to help build trust, shared purpose and higher levels of awareness.

The open space process asks people to address concerns and actions on a specific issue. To be successful the people involved must feel passionate and care about the issues being discussed. For example, reducing wastage, ideas for a new marketing campaign, fund-raising issues for a school fete could all be topics in the right context.

The hypothesis of open space is that people can quickly and instantaneously create solutions without massive amounts of preparation and external assistance. In this process people are allowed, over a period of one to three days, to work through issues without the imposition of fixed agendas and tightly controlled presentations. Typically, people stand or sit in circles and engage in dialogue, which leads to a higher level of understanding and clarity. In doing so, they normally follow a number of simple ground rules:

Give maximum opportunity for each person to contribute.

If a person feels that they are not learning or contributing, he or she can leave.

All issues raised will be discussed unless it is decided not to do so.

No prescribed outcome is allowed to dictate the process.

At the end of the meeting, the proceedings are produced in a hard copy format or, better still, published on an easily edited e-version on the World Wide Web, intranet site or business portal. This commitment to action often leads to the establishment of action groups and areas of activity, which in turn lead to breakthroughs in knowledge, insight and action.

In recent years, more sophisticated advances in technology have been used to encourage further collaboration and teaming via advances such as virtual chat rooms, file sharing, video-conferencing, web cams and search engines capabilities. However, the traditional enablers such as face-to-face conversations, e-mail, telephone and fax are still the most common modes of communication.

Interestingly, the most value in open space is when things are not easy to resolve and there is no simple solution, and there is a high potential for creative tension and exchange. It is in this domain that the chances of landmark discoveries and innovation can best occur.

Summary

Trust is the life force of knowledge. The higher the trust the greater the potential for the sharing of knowledge. To become better in building trust there needs to be a clear acceptance that trust may be limited, is hard earned and can be easily lost. Trust does not occur naturally for most people. Building trust requires faith that people with the right level of responsibility and fairness can help others successfully to learn and work together. In time our capacity to build trust will depend not only on how trust is received, but also on how we ourselves view trust. One method that helps high levels of trust is open space.

Chapter 3: Expanding Your Thinking

Overview

Present thinking people kill the future. (Ken Blanchard)

Expanding our thinking requires:

knowing the special abilities that drive our expertise

exploring ‘big, hairy and audacious goals’

discovering what you do not know

sharing the benefits of what we do

healthy questioning of your plans and actions.

Being ready for tomorrow

In a dynamic world dominated by economic, social and political change, you cannot wait for the luxury of things to settle down. You must use your know-how to anticipate and respond to the specific changes affecting ‘your’ world. In business, this means being ready to anticipate what may be happening next. This may involve exploring the changing needs of your customers, varying market conditions or any other factor that may threaten the future or success of your business.

Dorothy Leonard the author of Wellsprings of Knowledge discusses how our capabilities and expertise can be both helpful and a hindrance. That is, our knowledge can quickly become a problem if it fails to adapt to changes and challenges. A business rigidity like a capability can be in the form of skill, managerial system or a belief, but what gets a business or career into trouble is when the expertise and know-how we have is at odds with where we need to go next. Let us take Polaroid, the once proud international business which ceased trading in 2001, as an example.

Polaroid could not change its core expertise from on negative film processing to the world of digital imaging, the result being that Polaroid’s core capability had reached its use by date. As Leonard also explains, the National Aeronautics and Space Administration (NASA) is another prime example of how capabilities must change. The abilities that got a man on the moon in 1969 are hardly those they will need to land a human being on Mars.

The lessons of Polaroid and NASA are transferable to every business in society, whether it is growing crops on a farm, changing the menu in a food bar or revamping the curriculum in a university. Our desire to modify our thinking and advance our capabilities is essential. However, what makes this discussion on capabilities so important is that the habits of individuals and the abilities of business are not easily changed. Even with clear evidence for change, we must be motivated to make the change and reposition our knowledge.

One of the joys and burdens of winning the knowledge game is that our talents and abilities are often deeply hidden in our minds. It is easy to say that the success of a business is the brand, the location or an innovative design, but it is understanding how these abilities are maintained and sustained that is most important. Is it the understanding of adhesives at 3M that makes them special, or is it their business leadership that actively encourages ideas to come from anywhere at any time that makes them so special? Such business self-awareness is priceless!

Leonard suggests that one practical way to map your capabilities in your business is to examine the last five innovations that you have implemented. Where did you draw your knowledge from and what form did it take? What physical asset, specific expertise or attitude is driving your success? Asking and answering such questions well help you to identify and learn from your business experience and be more successful in uncovering deeper knowledge and insight.

It is amazing how many managers are insulated from an honest assessment of their capabilities, whether it is in the private or public sector, in large or small businesses. Decisions are often made with insufficient knowledge and scanning of the environment and a lack of awareness of strengths and weaknesses, the result being a series of biased, subjective and filtered conclusions and a very poor action. As will be discussed in Chapter 6, many decision-makers are decades behind in how they screen and scan their

competitive environment. This is particularly the case for small and medium-sized businesses, where the cost of such analysis and thinking is often seen as too expensive, time-consuming and complex. However, this may not be the case.

Competitive intelligence and deeper thinking about our capabilities with the right level of planning and implementation can pay for itself with better results and business advantage. Although market signals are rarely easy to read, asking the right questions can make a big difference, particularly if more effort is spent gaining quality data and insight from the right people. Needless to say, relying on a few trusted friends or just reading a one-page news summary is hardly sufficient in today’s marketplace. We need to be much more clever and sophisticated in order to be successful. Finding out too late is a luxury no one can afford. We need to build a business attitude where everyone keeps their eyes and ears open to important signals in the marketplace so that our capabilities are relevant.

To do this requires us to stretch our imagination from the likely and predictable to the unthinkable or non-predictable. In a practical sense, drafting a plan for learning and action is a great start. To do this, you should be asking yourself which capabilities you wish to have in twelve months’ time. Then go about listing and completing actions to help get you there. Such planning can be a beautiful safeguard for an ever-changing world.

We only need to ponder for a minute some of changes that have affected our lives during the last few years. Who could have predicted the attack on World Trade Center in New York on 11 September 2001? Interestingly, General Electric did have a contingency back-up plan in the event of such an incident occurring. Within thirty minutes of the attack, the systems and data that were lost in the attack were backed up and replaced from alternative sources. All this planning was done in their scenario thinking well in advance.

In the modern business world, everything can be rosy and then in the blink of an eye your whole future can become very, very cloudy. It was only five years ago that Bill Gates said Microsoft had two years to change otherwise it would be out of business. Now the life cycle in the software industry is much shorter. It is not unusual for businesses in this industry now to talk about three-month scenarios when it comes to planning. What a difference five years can make!

Take, for example, book and music shops. These are finding they must have a web presence if they are going to compete with the Amazons of this world. Such queue-jumping in the supply chain has now become very common in modern business, where access to instant information via the World Wide Web is common-place. These profound changes have created a whole new marketplace dominated by e-commerce, branding and cyberspace rather than by where you live and which building or home you work in.

Certainly with modern change, it places a whole new pressure on our ability to grow our know-how. Being a market leader is increasingly meaningless if customers can discover and find better options elsewhere. A year can now feel like a lifetime. It was recently expressed to me that we are now living in dogs’ years. That is, for each of our human years it now feels like we are living seven. Everything seems to be happening at a million miles an hour. Such a pace of change can make us feel out of control. However, it is not all bad news! Living in change can also be incredibly exciting and invigorating, particularly if we are motivated enough to learn smarter and pool expertise to meet the challenges that lie ahead.

So the message of adaptability, agility and flexibility is central to winning the knowledge game. Take another issue like public health; here government employees are under

constant pressures to meet the expectations of the media, voters, politicians and legislation, often with very limited resources and budgets. Then, depending on the issue of the day, the priorities can change overnight and the employees and health professionals must be ready to adapt and respond without a moment’s notice.

Breaking our limits

One of the most common mistakes people make is that they become stuck with only one view of the future. Whether you are a sports coach, a small business operator or are planning a weekend holiday, predicting what may or may not happen next is part of life. The skill of opening your mind to the future is vitally important if you wish to organize your resources and capabilities to meet the next challenge.

As already explained, our level of preparedness is a major factor in how well we will cope. We need to encourage people to open their thinking to new thoughts and perceptions. As Gary Haseldine from Haseldine Winners International says, success is only a new thought away. However, if we paralyse ourselves by unnecessary limits our capacity to evolve and adapt will struggle. Expanding our thinking requires us to question our self-imposed labels, values and attitudes. Winning the knowledge game is a process of growth based on critical review and examination. Business can only change direction or people can only change their lives by altering and adjusting their attitudes.

The best chance of expanding our thinking is to allow the unthinkable or uncomfortable to be said. A low tolerance for different or eccentric thinking is a recipe for business demise and stagnation. Similarly you cannot expect people to be thrown in a meeting room and asked to be creative, leading edge and ground-breaking. You need to create the environment and a system to help toss ideas around. We need to ensure that people have the right energy and inspiration to expand their level of thinking. Brian Garrett, chief executive officer (CEO) of the Commonwealth Scientific and Industrial Research Organization (CSIRO), requested when he first arrived in the business in 2000, big, hairy and audacious goals for the future. In doing so he helped to shape a new direction for the future.

Understandably, people are uncomfortable thinking away from the present. Ann Andrews from a business called Teams From Woe to Go recently shared the remarkable results from a survey of Fortune 500 companies. In the study, they were asked, what percentage of their time did they plan for their future? What would be your answer? Perhaps 50 per cent, 20 per cent, 10 per cent or even less? Well the answer came back as 3 per cent. Needless to say, if you feel uncomfortable about future planning you are not alone and it is perfectly normal to feel anxious and a little nervous about the process. However, modern business managers must do much more in the area of thinking about their future. It is my experience that most career, life and business planning is at best scratchy, shallow and conservative. Typically, the limited thinking manifests itself as simple predictions based on known events, which leads to very few surprises and rarely prepares people for what happens next. People may have been able to rely on such thinking a hundred years ago but it is certainly fraught with danger in the chaotic world of the twenty-first century.

To help people sharpen their thinking about their limits and possibilities, teams need to be established to help people study the future. I have found that encouraging people to reframe their thinking can be a major asset to building expanded imagination and insight. For example, asking ‘What if ’ questions can be very worthwhile, that is, taking the time to frame questions using the words ‘what if ’ as an opener. Recent questions I have asked with a banking client included:

What if the interest rates drop by 0.5 per cent?

What if funding is slashed by 15 per cent?

What if we do not get the new staff member by July?

In a similar vein, IBM like many other businesses has learned to use ‘So what’ questions to grow their business capacity. For example, let us assume a competitor is launching a new product or service in the marketplace. The response to the competitor action might be, ‘So what?’ In doing so, the ‘So what?’ question may create a new insight that might better prepare the business for the future by fine-tuning its response.

Inspiring a worthwhile purpose

Gone are the days that people can go about their business with a scant disregard for the ramifications on others. We are increasingly expected to be corporate citizens who demonstrate a clear social charter and responsibility to society rather than just being pre-occupied by profit and shareholder return.

Aiming a little higher and broader can make a world of difference to the support you will receive for your business and provide a much higher potential for long-term success. As Dr Ronald Forbes, from the Leaderskill Group in Sydney reminded me in a timely e-mail, if the benefit of what you and your business do does not add to the well-being of the planet, society or the client you should scrap it. He went on to say that if you take this stand you will find that people will respect you more and you will feel a greater buzz in what you are doing. Such intentions will enable you to see the gaps in your current approach and will lead to higher levels of accountability, transparency and integrity.

Here are some well-known and not so well-known examples of how a different thinking can affect business strategy and process:

At Kodak , they moved from the photo business to the memory business.

Scandinavian Airlines moved from flying planes to flying people.

A counselling service, instead of offering only marriage counselling, now offers relationship counselling.

A health -care provider, instead of providing health-care administration on breast cancer, is now focusing on saving lives.

Of course, to arrive at such resolutions you need to understand your market or business environment. There must be an honest assessment of capabilities based on current and future trends. Such studies will often lead to a number of trend areas being explored:

technology

business culture

economic and financial change

environmental demands

individual capacity and morale

political government pressures

demographics/trends in society

global trends

organizational capacity

customer expectations

regional or local issues.

The result is that you and your business will become more acutely aware of the business’s strengths and weaknesses while also becoming clearer as to which knowledge and capabilities will need nurturing.

Of course, the benefits of these conversations will not occur overnight. Deeper and far-reaching explorations need to be part of the corporate or business psyche. In some cases it could take three to six months before any workable and agreed strategies can be attained. This will be particularly the case if this type of thinking is seen as unusual and unnatural. In the more stable business environment such scenario thinking should be seriously considered every two years. How far you look ahead will depend on the nature of the business. For example, in 1998 Honeywell set up a global think-tank process over several months looking at the year 2010, CSIRO looked twenty-five years ahead in 2001 and the country of Singapore has done similarly in their mission to become an Intelligent Island.

Bringing in new points of view

One of the practical realities of expanding thinking is that you will need to listen to new and different points of view to uncover new territory. Whether having a conversation with an industry authority, reading more widely and/or attending a trade conference, it is imperative that you are open to a different message.

In practice, this could mean bringing together thought leaders or experts in a business process, organizing a monthly breakfast for some industry observers or planting a devil’s advocate in a debate. It could also involve holding research interviews with customers, clients or colleagues before proceeding with action. Such a mobilization of wisdom is vital in today’s business world.

During the past fifteen years, I have been lucky to be part of many ground-breaking business processes which have stretched the imagination of their people. For example, at Coca-Cola, during a strategic planning launch, we invited a major customer to come in and share what they liked and disliked about the current service. This input helped put the whole change process into context. On numerous occasions, with other businesses, I have asked teams to undertake field research before attending a planning meeting. Such preparation can make a world of difference to the end result.

Goran Carstedt, a past senior manager in IKEA Europe, tells the story of how he often hovered around the car park outside his retail outlets to discover customer reactions and needs. In other businesses, key people are sent into different marketplaces, countries and regions to discover how they can deliver better service. I know from personal experience that better senior executives make it their business to find the time to listen to their front-line staff, customers, suppliers and other stakeholders as often as possible.

So what do you do if this premise of bringing in new points of view and expanding your thinking is a whole new skill? Why not follow this simple method suggested by Brendan Hall, a leading authority on elearning in the USA. He suggests the following five-step process:

Photocopy a yearly calendar for the next five years.

Spend three hours with pen and paper in a nature-filled or a soulful place and speculate about the future.

Interview five internal customers about their views.

Interview five vendors, suppliers or customers.

Set up a think tank with others to create alternative scenarios for the future. (I find working breakfasts or lunches are great.)

Implementing smarter actions

It is one thing to come up with great ideas, but you also need a good action plan. Here again expanding our thinking must continue into implementation. Managers often make the mistake of leaving their creativity behind when it comes to key milestones, actions and responsibilities. Done well, action planning and review is where the majority of our most critical part of business learning takes place.

For me, giving myself permission to undertake different approaches to planning has dramatically improved my expertise, confidence and success in achieving goals, while also learning more. It also helps remove much of the pain, struggle and anguish from the more ambitious goals that are faced.

One such approach is called Backwards Planning. Assuming I want to learn how to create a home page on the World Wide Web, there are a series of incremental steps that need to be followed in order to achieve that goal. Starting at the end point – a completed home page on the World Wide Web – you list actions and outcomes in reverse order from completion to the start.

Let us say over a thirty-day period you make comments every five days (that is, day 25, day 20, day 15, and so on). You then list observable actions at each of these days. Of course, the time frames will vary depending on the project but the idea of Backwards Planning will remain. For example, when I was completing the second draft for this book, I gave myself eight days between 23 December and 7 January. I then mapped out a measurable plan to achieve my goal, while also finding time for other parts of my life over the Christmas and New Year period.

As well as developing a carefully crafted plan, it is also helpful to have checks and balances to ensure that you are not falling into the trap of jumping into quick-fix solutions. So, instead of racing into premature action without thinking, you may need to stop and ponder before proceeding. Questions that can help to expand your thinking here include:

How would you describe what you are trying to solve or fix?

What are the consequences of the current situation?

What is your desired outcome?

What is your normal or quick-fix solution to this situation?

What could be the negative and positive consequences of taking this action?

Given this observation, how would you redefine your solution or strategy?

Summary

Expansive thinking is a mandatory part of putting knowledge to work. Staying comfortable within our known universe is a recipe for disaster. We must be prepared to go to new places and find new answers to many of our questions, whether it is becoming more curious in what we do or asking clients and customers for their opinion. We must be better prepared for surprise and the unthinkable, and be prepared to uncover those special abilities you will need to face your future. To do this you must be open to exploring new methods of planning and preparing yourself for the action and learning you will need to undertake and review.

Chapter 4: Faster, Deeper Learning

Overview

Busy people must find even more time for reflection and checking in.

(Lyn Bousefield)

Faster, deeper learning requires:

trusting your intuition

reviewing what you have learnt

archiving your stories, facts and wisdom

using advances in digital technology

building a network of generous sharers.

Learning in a fifteen-minute world

The story of Carol and Victor

It is 4.45 p.m. on a typical working day for Carol and Victor, in their small home office in an inner city area. At the front door is a courier tapping her foot, expecting immediate attention but for the moment both Victor and Carol are preoccupied.

In the next fifteen minutes Carol needs to finish a search on the World Wide Web for the latest news on an economic situation in Indonesia. She needs this information so that she can contribute to a telephone conference call at 5.00 p.m. with her major client and she is expected to contribute some intelligent comments on the export potential there. Victor is also frantically trying to get on top of his workload. He is already two days behind with his e-mails and the taxation department is chasing the latest financial reports. As well as this he is struggling to prepare for an upcoming examination at university. He is seriously thinking of dropping out and enrolling in an e-learning programme instead.

Needless to say Carol and Victor are feeling swamped. The courier has her demands too; she is expected to complete four more deliveries before 5.30 p.m. She wants to make the fast train home, so that she can make her commitment to coach the local girls’ basketball team at 7.00 p.m.

The ‘Story of Carol and Victor’ is indicative of what most of us face on a daily basis. We are living in a fifteen-minute world, where people struggle not only to do their job well and meet their obligations, but also do the learning and activities they desire to keep up to date and fulfilled.

In the fifteen-minute world, you are expected to respond and act to meet every obligation. It can at times be uncompromising and it pulls no punches. If left unchecked, you can quickly become burnt out and unproductive. Apart from escaping to a retreat somewhere in the country or locking the doors to your home and turning off all digital and electrical appliances, we all have to face the fifteen-minute world on a daily basis. You can easily become so busy that you never discover better ways of doing things and, as a result, can quickly fall into the trap of living a life full of ‘busyMess’ and not ‘busyness’. This is a central challenge in modern business and has profound implications on how we win the knowledge game. Managers and businesses must find better ways to step outside this frantic fifteen-minute world and discover what is vital and important. At first such an investment may seem odd and out of character, but unless managers think deeply about their critical challenges they will never obtain the insight they need to move their businesses and lives forward with more imagination and potential.

Of course, the fifteen-minute world may not be all that bad; there is a certain excitement and engagement that comes from a busy fast-paced life. However, if our desire is to live a smarter and enjoyable existence we must put our thinking caps on to avoid some potential traps. These include trying to do too much, being too busy to really notice what is going on, failing to prioritize and not reducing unnecessary costs and activity.

Similarly, by not letting the fifteen-minute world dominate us it increases our chances of being more reflective and aware of people’s concerns and expectations. This result being a greater potential for empathy, compassion and a real understanding of what is actually

going on. On a personal level, I have found a regular practice of meditating has helped me to clear my mind and take a fresh look at situations. To do this I take a few moments each day to notice the rising and falling of my breathing and my state of mind. This simple exercise has helped me build a clearer view of what is really happening while creating a mind space where new insight may bubble up. During the four years I have been deploying this practice I have found I have more creativity and energy to fight the harder challenges in life by staying a little calmer. So, whatever method you use, whether it is taking time to sit in a park or undertaking a little exercise, do something each day to check into your mind on a regular basis. Such discipline will certainly help you to respond to the complexities, demands and pressures of modern living.

Going beyond speed

Many of us have heard the story of the tortoise and the hare, where the tortoise calmly walked during the race, eventually beating its much faster and frantic rival. A similar story is told in Japanese culture where two samurai warriors are racing through a field of long bamboo. Here the samurai who took the time to stop and sharpen his sword was victorious. Such simple wisdom, that we need to reflect and catch breath, is vitally important when it comes to putting knowledge to work. Speed by itself is not enough!

I remember presenting my first training session in Singapore, where I was using a combination of PowerPoint slides and small group activities. The briefing that I had been given was that in Singapore it was customary to present very fast, with many visuals and minimal interaction. I was told that learners wanted to collect the information quickly and leave with the collected ideas for future use. At the time this raised a tremendous dilemma for me because over the past twenty years I had learnt that the best learning occurs when you stop racing and instead create opportunities for people to interact, share insight and collaborate.

As I adapted my training style to the Singaporean culture, I quickly discovered that my assumptions were also correct in their culture. All I needed to do was to spend a little more time gaining permission for involvement and making sure people felt safe before you expected them to express their views and be actively involved. As a result my newly adapted style led to greater learning and flow because the training delivery was correctly paced and people were able to share key issues and discoveries as they occurred. The insight of gaining permission has helped me with other cultures since then, as well.

The lesson behind this training scenario of course translates into other situations in business. It could be a team meeting, a chat over a business lunch or having a conversation on the Internet, all of which need the right level of permission, interaction and openness for faster and deeper learning to occur.

Clearly, moving from a world of speed to one of combining speed with depth will, for many people, be an unnatural act. It requires people to break lifetime habits and develop new skills of reflection and review. It also requires mutual support and peer assistance that is sadly lacking in many places and situations. For example, if a manager is working in a business which is in constant crisis and chaos, it makes our task of smarter learning somewhat harder. However, the good news is that there are some simple things you can do to help you.

First, you need to organize the right times and places in which to have deeper conversations. There are certainly times when you will need to farm out high volumes of information but there are times when you should slow down and encourage deeper reflection. One such example was recently shared by Cris Townley from Deloitte Touche Tohmatsu at a Standards Australia’s national conference on Knowledge Management. She discussed how a carefully organized and facilitated lunch between business partners had helped create a much needed cross-fertilization of ideas in the business. She used the metaphor of seeing the lunch gatherings as bringing the various nomadic campfires together to build higher levels of support and know-how in the business.

Second, you must be prepared to move beyond just doing activities and tasks, and to encourage people to learn from what they are doing. This is particularly tough in a project-

driven business, where the next task is always the next item on the agenda. So somewhere, we must create different dynamics for people to better circulate and apply their know-how. According to Ron Sanchez, a European authority on organizational learning, there are a number of processes through which knowledge must travel in a business for there to be healthy learning.

First, individuals must create knowledge; second, this is shared within groups. The groups then use their knowledge to understand co-ordinated action and to jointly develop new capabilities. Finally, these groups share their knowledge with other groups to generate a business-wide benefit. The flow and transfer of knowledge which is circulated is the heartbeat of business change and innovation. For an organizational learning cycle to be successful, you need knowledge to be explored and evaluated by a combination of individuals and groups who passionately believe in the benefit of building and sharing wisdom.

Sanchez also explains that if you wish to guide healthy business learning you must understand that learning fundamentally occurs in the minds of individuals as they try to make sense of their world. For example, what we believe to be true (in other words, what we think we know) must always be subject to ongoing tests and validation, and we must be willing to replace old beliefs, old knowledge and models. An individual manager, like anyone else in a business, must convincingly explain their ideas to others before those ideas will ever become accepted or seen as creditable. The essential role of managers must be done in a spirit of exploration, support and stimulation for it to generate breakthrough thinking and innovation. So, when we interact and collaborate with others, we need to be tuned into three basic problems when you are seeking to raise the level of wisdom. These problems are:

People may know more than they say.

People may say more than they know.

People place their own meanings on what they hear, see or experience.

Here again there are many ways to generate this spirit of exchange and to ensure you are learning both more deeply as well as faster. In the following chapters countless ways of doing this will be explained; for the moment, here are three practical suggestions to help the exchange between people in a business and to open hearts and minds.

Learning journals

Keep a written log of what you are learning. It provides a point of reference for your ongoing growth of knowledge. It helps you gain some control and insight into how often subtle changes can make a world of difference. To maintain a learning journal, spend between five and ten minutes a day capturing what you have experienced and what you have observed. If you dislike writing, you can draw pictures or use a Dictaphone or tape recorder.

Peter Honey, a British consultant and author, suggests the following three-step process when logging your entries:

Describe the context of your experience, whether it is good or bad, planned or unplanned. Describe who was involved and how you felt in all its wonder.

Summarize your conclusions or the lessons you learnt and dilemmas you confronted in the experiences.

Develop a plan to do something better or differently in light of your conclusions.

Fifteen-minute action reviews

Make fifteen-minute action reviews part of your daily repertoire. This method has been regularly used by organizations such as BP-Amoco and the US military, and is ideal for projects or tasks.

The fifteen-minute action review asks individuals and teams to explore four fundamental questions, when doing and reviewing tasks:

What is supposed to happen?

What actually happened?

Why is there a difference?

What can we learn from this?

These conversations can do amazing things to your level of individual, group and business understanding. I use action reviews in most of my work when I coach, train or consult. They are gems, particularly when there are clearly observable projects or tasks being undertaken. They also help to audit your processes and explore why work is being done as well as how it is being done.

Ordered sharing

One of the realities of team or group sharing is that often there are different degrees of vocal contribution. Some people like to verbalize their thinking while others like to sit quietly. There are numerous times when you will desire people to share their thoughts and feelings on an equal basis. Geoffrey Caine, a US change consultant, introduced this method to me which I have been using ever since.

The reason I love this method is that it not only helps share knowledge but it also builds a sense of community and belonging which is so vital to fostering trust and support. It also helps to create a safe space to share. It is worth noting that ordered sharing has very strong parallels with the open space technique discussed in Chapter 2.

This ordered-sharing process follows six steps: 1. Sit in a small closed circle (this process usually works best with groups of up to

twelve).

2. Select a question or issue to be explored.

3. Each person expresses an opinion in turn.

4. Listeners must pay full attention and no one makes any comments on what is being said.

5. The group monitors timings and participation; each person should speak for ninety

seconds.

6. After each person speaks, the next person proceeds in order, after a brief moment of respectful silence.

Having performed the first rotation of conversation, it is often a good idea to revisit the question and ask for further observations about the themes and common messages discussed. This second exploration helps build threads and shared purpose in what is being communicated. Like most methods, it will take time for people to become comfortable with this method. However, after a couple of practices you will find the quality of learning will improve and, most importantly, you will start to see what really needs to be discussed. Often this takes the form of a different question or a modified topic.

Mastering your storage and retrieval

In a world of mass information, it is becoming increasingly difficult to remember everything you need. One moment you may feel you are on top of the world in what you need, then all of a sudden you can feel overloaded, smothered and very vulnerable.

During our school days, much emphasis was placed on developing our memories to get us out of trouble by trying to remember facts, principles and formulas. To do this we may have learnt a variety of techniques, including rote learning and mnemonics. Such techniques have been very helpful to us in the past, but in times of such rapid change we need to go one step further. We need to place greater emphasis on our storage, retrieval and access rather than relying just on memory. We each need to create systems to recall vital know-how (that is, principles, stories and facts) at a moment’s notice.

We now see this in businesses where archives or databases commonly exist on help desks or web pages to point people in the right direction. A common example of this occurring is when you venture into a bank. The bank employee will often follow prompts and instructions to help you. Depending on the question, the employee will often go to an online help desk to find the answer. The difficulty arises, however, when the knowledge is not archived and the individual has to use his or her own resources or memory to craft an answer. This is commonly the case with the more complex types of knowledge where the situation is out of the ordinary and has not been documented.

To keep up to date each business needs to make a special effort to keep the right flow of knowledge by using good storage and exchange methods. Further to this you may well be aware of the now common capability of IT platforms such as Lotus Notes that allow business people the ability to retrieve and action the latest in e-mail and corporate knowledge either from their normal workspace or when travelling.

For the moment, however, let us concentrate on what you can do personally to store and archive your knowledge. Without a doubt, learning how to archive knowledge has been the turning point in my career. There was a time some years ago when I realized how confused I had become by the mass of information stored in my head and in my office. The result was that I was experiencing enormous difficulty in keeping a tap on the rich resources available to me in the form of office books, notes and files.

One day, instead of putting all my energy into marketing, I allocated a proportion of my day to archiving some of the knowledge I had collected. Then, over a few months, I started building a living archive of my knowledge in the form of stories, training exercises, latest facts, statistics, best practice organizations, great web sites and working smarter tips.

The result has been truly transformational! Instead of relying on my memory I now have a system that enables me to recall things at a moment’s notice from my computer. Now, even when I am tired or am struggling for time, I can in most situations find an answer that has some merit. People often say they are impressed by what I know, but it is not my brilliance or my memory that has made a difference, it is how I store and access my knowledge. The great news is, this system is simply based on Word files and is not sophisticated. In time I will probably create new files using web browser technology, but for now the system is working fine. For example, when I decide to do a subject search, I do so by keying in a word or topic and ask the Find instruction in my software to retrieve

what I have stored. This method has given me instant access to knowledge which is essential in my profession as a consultant, speaker and author.

The make-up of your personal archive will vary depending on your interests. For example, I break my archives into subcategories to aid prompt access and use. However, you do not need to get too clever, it is more important that your overall structure is simple, flexible and easy to use. As you would expect, your archive is never static so you will need to update your facts or remove outdated knowledge. To do this I keep a work in progress file that has all my latest discoveries; then every three to six months I incorporate these into the main database. By doing this I keep the process of maintaining the personal archive manageable and not too time-consuming.

To assist you to build your personal archive, here is an alphabetical listing of some possible headings:

Achievements in past jobs and projects

Best practice organizations or better practices you have noticed

Discoveries from your learning journals

Distribution lists of important contacts

Excellent contacts (that is, mentors or advisers or coaches)

Facts, statistics and trends

Favourite quotes

Personal mission statement and career goals

Intranets and databases

Professional associations and personal networks

References and books and articles

Résumé

Universal wisdom, including key reminders on what is important to you in life

Vital procedures and checklists

Web sites, e-zines, search engines, interest/discussion groups and learning portals

Wisdom from past training courses and conferences.

Managing your personal knowledge archive is a discipline which gives you the foundation for longevity in your career, while also providing a solid grounding to any hobby or pursuit in life. I have found it to be the best safety valve I could have had in my profession. Of course, there will be times when your archive does not help you or you feel you need a second or third opinion; then you can go to the World Wide Web or contact someone for an answer or view. Either way, you cannot lose; you have an archive that will travel with you through life. The latest version of my knowledge archive is on my laptop computer, on my office computer and on my server at all times, and can be accessed within a moment’s notice, wherever I am in the world.

Exploring push and pull technologies

If you are serious about faster deeper learning, you should be accessing as much of the knowledge in the world of digital technology as you can. In recent years there has been a significant shift in the connectivity and accessibility to the Internet via palmtops and mobile phone networks in addition to the personal computer (PC). In developed economies the percentage of households with computers is now well over 50 per cent, with additional access also available from other locations such as digital television, Internet cafés and the workplace. Although in developing countries access has been historically very low, it is set to explode in the near future as the cost of wireless mobile devices such as palmtops comes down.

Taking the conversation a little further, it is timely to mention push and pull technologies. In doing so we are setting up more detailed discussions on digital technology in the conversations pertaining to growing competitive advantage when we explore how you can leverage digital technology for higher levels of learning, customer loyalty and business capability.

Push technologies

Push technologies help you to be informed on an area of interest when it becomes available. Like getting a letter in the mail, push technologies come in various forms including voice mail, short message systems, discussion groups, e-mail and electronic newsletter (that is, e-zines). For me, this means being on the distribution list of various e-zines on topics relevant to winning the knowledge game and this has helped me tremendously. These services are often free, but increasingly you are expected to pay for the better knowledge. One site that offers a variety of e-zines is www.austrainer.com.

In a business you can take the idea of push technology a little further. To aid the flow of vital knowledge selected people often are sent targeted information based on their speciality, interests and preferences, while in the consumer marketplace intelligent filtering is increasingly being used by businesses such as amazon.com and eBay to influence future new or different buying decisions of their customers. In the near future push technologies will also be extended to proximity marketing where global positioning systems in conjunction with a mobile phone or palmtop will send you a message based on your geographic location. For example, if you just enter a country town by car you are advised of a good lunch spot.

Pull technologies

Pull technologies are where you do the searching yourself and extract the information you need. Search engines are far ranging and varied, those I have found of most value are at www.google.com, www.askjeeves.com and www.dogpile.com. Increasingly you will find businesses now providing sophisticated search capacity to employees, suppliers, strategic alliances and customers to help them find instant answers, contacts or advice. Here knowledge resources and learning portals are made available to assist suppliers, key customers and employees to do their business. Organizations such as SAP, Cisco Systems and Kodak commonly use their web sites as an avenue to inform employees, suppliers and customers of key business operations and new products as well as sharing

important resources such as research, white papers and collaborative opportunities, the premise being that if you have an informed learning business relationship it is a solid one. You will also find the media and government bodies at a federal, state or community level full of wonderful free resources and assistance in this regard.

The danger here is that there is an assumption the people know how to search the Internet and business web sites such as intranets and portals. My experience is that this is not the case. Very few businesses teach this skill to their employees, suppliers and customers. Greater effort needs to be made to help people capture simple tips and deeper insights from cyberspace.

Discovering a web of sharers

As discussed, learning requires you to build and nurture a healthy array of connections, friends and resources. This rarely can be done alone; you need fellow travellers to help you.

To do this we need the right spirit of generosity and reciprocity. We also need to share our time and energy as well as helping others to do the same. Obviously we will find people who do not want to help, and that is to be expected. We also need to accept that some people will need proof of our intentions and desires before they decide to help, particularly given how busy people are in modern-day living.

To develop a network of sharers, we need to take the lead to show that exchange can be a winning formula. In business, people often make the mistake of approaching a senior manager or industry expert but often the best sources of knowledge may not hold any formal or acknowledged high-status position.

So, if you wish to build a good network of wisdom in business, you can begin by building a knowledge map and this involves you constantly asking these five questions:

Where do you go to find out answers to a process, procedure or way of doing a task base?

What information exists in my business and where is it located?

What relevant expertise resides outside my business, where does this expertise exist and how do I gain access to it?

What are the best sources of relevant internal and external information?

What expertise resides in my business or industry – who knows what?

From experience, creating a knowledge map can help you quickly to develop a listing of sharers and resources that can help you to explore problems or fill gaps in your learning. In doing so you will also soon discover who are real sharers in business. Then, if you are really smart, you will make it your business to bring these sharers and opinion leaders together and put them to work on a hot business issue. It is then you really see workplace or industry innovation at its best.

Summary

The modern business world expects instant answers, action and accountability. However, speed is only part of the equation. We must also be able to learn how to think deeply. Without this capacity we will struggle to make the improvements and progress we need. As a result, we require novel approaches to capture our wisdom and review our progress. To do this it is imperative that you build and maintain personal and business archives of important contemporary knowledge and contacts. The reality in modern business is that we all need smooth systems to help managers and other people access vital sources of enlightenment, inspiration and support at a moment’s notice. These systems can include keeping learning logs, undertaking action reviews and establishing knowledge maps of important avenues of help and assistance.

Chapter 5: Holding Meaningful Conversations

Overview

Successful knowledge transfer involves neither computers nor documents but rather interactions between people.

(Tom Davenport)

Holding meaningful conversations requires:

teamwork and shared benefit

trying different processes of group dynamics

liberating diversity, eccentricity and creativity

spontaneous exchange and circulation of ideas

transferring wisdom to where it is most needed.

Inviting a spirit of collaboration

One of the great symbols of freedom is the dove. Seeing one in flight engages many emotions including hope, pride and inspiration. It is a very similar feeling, when we share knowledge in a meaningful and constructive way. It lifts our belief that freedom of expression and connection does make a difference. When a conversation works well it provides a level of contribution and collaboration which is very hard to equal, simply because high leverage knowledge and innovation will happen if people work and learn together. If the flow and exchange is positive, a mutual benefit will result. We may not always be able to measure it but we know within our hearts it is happening.

High-quality relationships have become the most valuable commodity in business, more important than land, factories and bank accounts. Those who succeed in business today can openly gain the commitment of, and partner and team with, its customers, suppliers, alliances or its employees. Without this attitude winning the knowledge game is very difficult indeed.

To arrive at a point where relationships are beneficial, we need to create the dynamics of the teamwork required. Whatever the history or situation, we can never take collaboration for granted. Collaboration is much more than just communicating or steering a meeting; we need to create maximum opportunity for people to bond, find common ground, establish a plan and build on each other’s ideas. Without such an intention and shared benefit, meaningful conversation will remain a distant dream. The truth is that, like trust, the lack of genuine collaboration is the biggest killer of healthy learning and innovation.

The key to growing successful relationships is not about demanding a contribution; it is about inviting people to participate and then asking for their permission. The more managers impose, the less likely they will achieve the openness they need. Forced participation is not only a killer of contribution; it also raises passive resistance, which stifles the potential for quality answers, questions and solutions. To engage higher levels of contribution and collaboration businesses should consider some smart ground rules, which will help it guide better exchange and cooperation. If you reach agreement on some common-sense ground rules you will find the group dynamics will be so much easier. The ground rules that I have found most versatile and useful, have been adapted from the work of Bob Dick and Tim Dalmau. These are:

Agree on and pursue common goals.

Explore why people need each other.

Show respect, share time and decisions.

Attend to each other and listen for understanding.

Build on ideas and acknowledge feelings.

Reveal assumptions before acting on them.

All take responsibility for the quality of conversation.

Many teams I have worked with have developed their own ground rules. Here is a listing of behaviours created by the Centre for Children Senior Management Team in the

Benevolent Society based in Sydney.

To be an outstanding team we will:

trust, respect and support each other, embracing our strengths, experience and diversity

listen to, communicate with and seek to learn from each other

have a shared purpose that motivates us

acknowledge reflection as a vital part of our work

all take responsibility for the team’s effectiveness.

So avoid the trap of going through the motions of being a good team. Come clean on the vital behaviours you need to be truly outstanding and high performing. Build a spirit of collaboration by fostering action and enhanced understanding, while recognizing that meaningful conversation is not about ignoring the difficult issue. It is the exact opposite! We do not want people to be so busy being nice that nothing happens. The fact is that when collaboration has purpose and transparency it will contribute more.

We also must encourage people to build on other people’s ideas. It is often the case that people are loath to use the wisdom of others. According to Korn/Ferry International, an executive recruitment firm who surveyed over 4500 scientists and engineers and 500 corporate leaders, 72 per cent of those surveyed said that knowledge was not reused across their business. Only 12 per cent said they had access to lessons invented elsewhere within their business. These results would strongly validate that collaboration is either sadly lacking or poorly channelled in most businesses.

In this regard, you may wish to explore the following questions in the future to raise the standard of collaboration, teamwork and partnering:

What are the current ways people collaborate?

Which staff, routines and decision-making processes help and hinder collaboration?

What routines, situations or rituals help people to engage in meaningful conversation?

Which behaviours or rewards steer people away from meaningful contribution, collaboration and partnering?

With whom do people collaborate and for what reason?

Who are the champions and killers of collaboration?

To raise the bar on why a spirit of collaboration is important, it must be painfully clear why it is so important. Needless to say, if there is a feeling of fear or duress, the chances of a deep and meaningful conversation will be remote. We need to create healthy dynamics, where people can take responsibility for future action and learning, and be free enough to suggest the radical and unconventional – leading to a distinct possibility that egos are tossed out of the door and replaced by liberated honesty.

Freshening up your meetings

One of the great throwaway lines in business is ‘We have knowledge sharing, we regularly hold meetings’. From experience, such group gatherings are rarely in the knowledge zone. They are full of unspoken agendas, undisclosed ideas and repressed feelings. We only need to read the following commonly quoted statistic in the computer industry to understand that we do not always communicate well: it is estimated that 50 per cent of the rework in computer software alone is due to a lack of sharing of assumptions on fundamental issues.

Of course, this legacy is not just a bastion of the computer industry. It is a claim that could be relevant to any area of human communication and interaction. Managers and their businesses generally can do much better in how they conduct and organize their interactions, meetings and conversations.

Taking the trouble to review how we meet can make a massive difference to the results we achieve. Over the past twenty years I have made this my speciality and I never cease to be amazed what you can generate with a little more imagination, foresight and planning. There are, of course, times when a firmly controlled agenda and debate may be necessary. However, on the whole this approach is excessively used. The fact is you cannot schedule creativity and fun; it must be engaged and encouraged, with a clear purpose and in the right environment.

There are many ways to freshen up your meetings, ranging from simple adjustments such as having different people chair a discussion or where the jamming of ideas is actively encouraged within a high-energy weekend retreat. The key is not to overuse the same technique; mix them around and keep it interesting. Already in earlier chapters we have discussed how methods such as open space, action reviews and ordered sharing can help stimulate innovation and raise awareness. Here are three additional approaches to aid exchange, innovation and learning.

Brown bag sessions

People bring their own lunch, hence the word ‘brown bag’, or sandwiches are provided to encourage freewheeling conversations. Here issues are more far reaching than normally would be discussed at work. Examples of topics could be balancing both work and home, diet and nutrition or working from home. Such gatherings often include fun, interactive exercises and games. The aim of brown bag sessions is not about heavy and intensive conversation, but about enjoyment, doing something different and building community spirit. It also gives people a chance to explore issues and make connections and friendships that they would not otherwise have an opportunity to do in their work.

Knowledge fairs

Creating forums for people to share is widely used in business and communities across the world. When it comes to knowledge fairs the sky is the limit! With the right framework, a little mystery and some celebration, these events can be truly transformational. The good thing is that successful knowledge fairs can easily pay for themselves in increased enthusiasm, networking and performance for many years to come. Two examples among

my clients in the past year include teams sharing their ideas for better quality on large cardboard posters and a marketing division of a pharmaceutical company setting up a circus tent in a park and inviting product managers to run games based on product knowledge.

Getting on the web

Meetings and collaborative thinking need not occur face to face in the same place. Now, with the help of digital technology, it is much easier to share ideas or have collaborative experiences with people who are in a different time and place. The world of the virtual meeting has truly arrived. Whether you are sharing comments on documents, presentations or emerging thoughts or are using message boards to canvas feedback, being face to face at the same time has become less of a problem. We no longer have to wait in the same room to have a meaningful conversation to start things off. As long as you have a clear purpose and the right technology and software you can begin.

To highlight the power of collaborative technology here is one of my favourite stories by Professor Peter Sheldrake from the Royal Melbourne Institute of Technology. He tells a story about a graphic designer in Melbourne who was asked on a Friday afternoon to do a layout for a newsletter. The manager wanted her to have the job finished by first thing Monday morning. To the manager’s complete surprise, the graphic designer handed in a full layout on time, at the beginning of work on the Monday. When quizzed on how she did it, she just smiled and said a friend in London helped her by using file sharing and e-mail on her home computer. She went on to explain, because of the time difference of ten hours and that her friend had a couple of hours to spare she was able to help out. Anyway a month earlier, she did the same in reverse. This story which I heard some five years ago began my interest in this rapidly growing field. The area of collaborative technology will be explored further in Chapter 11.

Bringing diverse people together

In many cases, the only way to solve a problem is to bring a diverse group of people together. In a fifteen-minute world, we often do not have the time to wait around; we need to explore new avenues to fast-track thinking and innovation.

To do this we must seek out new ways of promoting a diversity of opinion. In recent years in business we have seen the emergence of many new structures and conversations to do this, including cross-functional teams, scheduled conversations with customers and, finally, meetings with suppliers. All these approaches are examples of how businesses are trying to break new ground, open up our minds and discover new learning partnerships.

When viewing this trend we must see it as more than just pooling expertise and know-how; we are exploring new ways to help people and business to think differently. As has been said many times before, like-minded people produce like-minded results. So when we are trying to break new ground we can rarely do this by cloning. We need to liberate diversity, eccentricity and creativity to have high-value exchanges and win the knowledge game.

So what does it take to build such positive creative tension? Be assured, fostering different minds to work together is not plain sailing. It can easily raise tension and conflict if not managed properly with the right ground rules.

To give some substance to this, let us explore how diversity is managed within new teams, e-teams and consortiums.

New teams

Hardly a week passes without a team changing shape or a new one forming. This is a very common occurrence in business. When it comes to a new team, typically there are a number of priority issues that have to be managed. First, trust needs to be built and rapport established. One way a new team can do this is to share what they have in common and what special qualities people bring with them to this new experience. A conversation about this may be constructed in a number of ways, including having people explain their current role and what role they hope to play in the new team.

In some cases, it helps to have people tell stories of what they have done in the past. This could include sharing what they feel good about and then following this up with past changes they have made. What are their current interests? What improvements are they now planning? You often find that these conversations will open up the level of trust and cohesion in the team. Then, having bonded a little, the team is much more likely to work together and resolve the other issues such as:

clarifying a common vision and shared purpose

agreeing on the right behaviours and ground rules

discussing roles and procedures

setting up regular rituals for dialogue

establishing measures for evaluation

celebrating success.

E-teams

In the modern workplace, it is quite likely a person will be working with team members whom they are unlikely to, or will never, physically meet. In these situations digital technology is the only means of communication whether by World Wide Web, web cam or video-conferencing. Although the skills of being in an e-team are very similar to those of being in a traditional team, there are some added finesses which need to be managed.

A firm lesson I have learnt is that in e-teams collaboration and contribution is far more difficult to sustain. If deadlines are missed or expectations are not met, people can go missing much more easily in eteams. It is nearly impossible to control behaviour if someone loses interest 5000 kilometres away. To minimize the chances of this happening, e-teams must nurture wonderful individual effort and deeper thinking by making sure that people work to a planned timetable, agreed purposes and have regular reviews of performance. For the team leader, this means making sure that individual and team effort is rewarded, effort is celebrated and milestones are constantly discussed and reinforced. Again, interests can be shared by e-noticeboard technology which is now freely available in the marketplace.

Consortiums and joint ventures

A common practice is for managers to pull together talent from other businesses to help generate a stronger collective effort. We see this in many business marketplaces, particularly in welfare, community groups and in small business. For example, in the government or not-for-profit sector, I know of very few agencies and charities that do not pool expertise, resources and costs to work smarter. You also see partnerships in fields such as new high technology, patent development and dot.com ventures, where people pool resources and expertise to better compete with the bigger players in the field. Needless to say, it does wonderful things for your reputation and intangible value if you are affiliated or connected to a good group of talent.

Like any form of business partnership, consortiums and joint ventures can raise many issues regarding confidentiality, protection of intellectual property and how the benefits can be rewarded. There is no doubt that if you have different egos, representations or relationships involved in a consortium the process can be more complex. Again it is fundamentally important to agree on key values, duties and goals. Agreed working behaviours can vary depending on the expectations and history of the people involved, but there needs to be some shared purpose for the consortium to work.

An excellent case study is ProGroup a niche consulting group which specializes in diversity support in the USA. Here is ProGroup’s modified and updated listing of behaviours for over five years. By exploring their agreed values listed at www.progroupinc.com you can get some sense of the sort of issues which can be explored if you venture into the consortium path.

Key behaviours (values to live by in ProGroup consortium):

We are committed to the success of ProGroup and each other.

We speak positively of our colleagues and clients and treat them with dignity.

We are responsible for our own well-being and development.

We listen with respect to each other and to our clients.

We are a living laboratory and learning organization.

We will partner with clients and do our best to identify and address their needs.

Once we make a commitment, we meet or exceed it.

We are clear, honest, direct and courageous in all communications.

We recognize the diversity of ProGroup as a strength to be accepted and appreciated.

Good intent is assumed and we act in ways that build trust.

Although we are doing serious work, our workplace will be a positive place where we can be ourselves, laugh and have fun.

Setting up communities of practice

If you choose to study the human body, you soon discover many things that amaze you, for example, how the skeleton holds the form and protects the vital organs from harm. Without it you would immediately fall into a heap of skin and tissue. Also, there are the circulation and nervous systems, which act as our life support providing trillions of receptors and pathways in our body, thereby providing the information and fuel we need to survive.

Like the human body, business has its own structure, which gives it a specific shape, look and identity. As in the human body, the formal reporting structure of a business is supplemented by a circulation system, which helps a business self-organize and adapt. If the circulation system works well, a business will respond in an agile and healthy way. If the circulation system fails, the business will struggle to adapt to its own unique environment.

Seeing a business as a living system helps managers and decision-makers better to understand how to build different and innovative relationships to business. It also gives the option that knowledge can stimulate a healthy circulation and flow, rather than trying always to resort to control and command. As in the case of the human skeleton, the business structure of top-down control is only one of the systems we have at our disposal.

Strangely, however, if you try to control the circulation of wisdom in your business you will fail. People are too complex and smart for that leadership style to work. As most of us clearly understand, much of what happens in businesses occurs informally and out of sight, in private conversation, in tearooms and on e-mail, well away from the eyes of senior management. The more you wish to control or manage knowledge, the less chance you have to put real innovation and change to work. Knowledge has a life force of its own. It is a constant evolution and flow and we have to tap the informal network as much as possible.

The good news is that there are many business case studies where organizations have explored and implemented approaches to help knit and blend formal knowledge sharing with the power of informal processes such as the grapevine, chatting and spontaneous exchange.

One approach is ‘communities of practice’. Other labels for this method include cross-functional teams, cross-boundary groups, communities of experience and, finally, interest or discussion groups. Of course, the label or term does not really matter. What is more important is that what is generated frees up the level of know-how and stimulates cross-fertilization of ideas. Then, in time, the business benefits either directly or indirectly.

The popularity of setting up communities of practice is also being backed up by solid evidence. Harkins, Carter and Timmins, who edited a study of best practice knowledge management, found that building communities was a major driver in the success of knowledge creation strategies with best practice businesses. Other success factors included having a sharper business focus, exhibiting a total commitment at all levels of the organization and having adequate rewards and incentives.

Some examples of communities of practice include:

The Department of Defense in New South Wales established a network of seventy-five training liaison officers in the 1980s in order better to share resources and ideas on learning and development.

Xerox technicians meet informally at the end of each day to share stories of what is happening in the field.

The New South Wales Health Department established learning pathways across regions to explore high-priority health issues among professionals.

A pharmaceutical business established study groups to explore solutions to a number of pressing issues including customer data management and knowledge management. The groups were cross-functional and included senior, middle and junior staff.

Shell has funded well over 150 communities of practice. One example is where instrumentation engineers network with each other to solve technical problems across the world.

Ernst and Young has over twenty-two global networks supporting the development of their organizational archive of knowledge.

The Australian Human Resources Institute has established and supported special interest groups for its members on specialist subject areas for well over a decade.

Finally, it is worth noting what a vibrant and successful community of practice needs to be a worthwhile contributor to the business. To be successful a healthy community of practice will most likely have:

a common sense of purpose, within the broad expectations of a business

a desire to share knowledge and self-manage itself

a high level of trust and loyalty

a common digital technology system which enables easy communication and connection

a highly respected and visible leadership which retracts from dominating proceedings

adequate budgets and administrative support

positive mentoring, coaching and peer support

a chance for deeper and more confidential advice outside the pry of the public scrutiny

passion and commitment, with good facilitation

realistic expectations about its purpose

if the time comes for closing up or disbanding, a view that this is seen as acceptable.

Circulating wisdom

Without the circulation of wisdom, great initiatives such as exciting team meetings and communities of practice may never reach their full potential. Again, there are numerous ways to circulate wisdom within business.

The path you choose depends in part on the style and character of the knowledge involved. What must be remembered is that simple checklists or routines can be shared if they are written down, but when the wisdom is locked up in people’s minds in the form of stories or experience they are harder to use. So great care must be taken to give time for people to share their formulas, mental models and views of the world.

In this regard, here are some examples of how knowledge is generated and dispersed successfully in business:

A team decides to apply their learned knowledge to a new situation or scenario. For example, a sales team reviews their performance in the marketplace and applies what they have learned to the next week.

Individuals and groups archive what they have learnt and place it on a business database so that it can be used elsewhere by others.

People provide peer assistance to another team. For example, a team leader in a factory in Fiji has developed a new way of reducing toxic waste. The global head office in Paris hears of this and the team leader is asked to go to Mexico to help reduce toxic waste in another factory. However, in assisting in Mexico, the team leader’s job is to get the Mexican team thinking, by listening and asking questions and avoiding telling what is required. Then when the Fijian team leader returns with new knowledge discovered in Mexico, he or she could make further changes in Fiji.

Placing scenarios, work in progress or case studies on a business web site or discussion forum to get other people’s opinions. This is particularly valuable in regard to situations yet to be confronted, or for those challenges which are more complex. For example, a past CEO of Heinz Watties in New Zealand described how they established shadow executive meetings of junior staff to review situations explored by senior executives at another time.

For those very infrequent requests such as obsolete technology and unique processes, a person is appointed to monitor and make sure the question is answered. In larger organizations good digital technology is important and on many occasions people may need to raise their question on the Internet to get an answer.

Summary

Generating excellent collaboration requires excellent communication, cohesive purpose and creative thinking with the right people at the right time and for the right reason. In this regard, having meaningful opportunities to participate is vitally important. Examples include cross-functional teams, e-teams and communities of practice. Businesses are full of innovative and fresh approaches to interaction and cross-fertilization. However, just because people are communicating or having a meeting does not necessarily mean you have winning innovation and business thinking. The ultimate success lies in the flexibility of leadership and the ability to captivate interest and involvement. Only then will you have the opportunities to open up people’s hearts and minds so that you can have the fertile ground to then grow competitive advantage and ensure lasting success.

Part Two: Growing Competitive Advantage Chapter List

Chapter 6: Creating a Smarter Business

Chapter 7: Spreading a Knowledge-Sharing Virus

Chapter 8: Riding the Waves of Change

Chapter 9: Sustaining and Keeping Talent

Chapter 10: Protecting Intellectual Property

Chapter 11: Leveraging Digital Technology

Chapter 12: Increasing Customer Loyalty

Chapter 13: Polishing Your Training Performance

To achieve competitive advantage in business requires a careful blend of excellent leadership, smart digital technology and inspired contributions from a wide array of people.

Business success relies on a combination of factors that are closely related to how well know-how is shared and put to work. For this to happen, a business culture must be grown that rewards the smart use of talent while also protecting vital secrets. There is no single path or quick-fix solution. You need to keep an eye on a variety of targets including smart business discipline, fostering an attitude of sharing, being adaptable to change, sustaining and keeping talent, leveraging digital technology, increasing customer loyalty and providing a rich array of opportunities for learning and innovation.

Chapter 6: Creating a Smarter Business

Overview

If Hewlett Packard knew what Hewlett Packard knows, we would be 3 times more profitable.

(Lew Platt)

Creating a smarter business requires:

both business intelligence and counterintelligence

marketplace data and research from private and public sources

clear and powerful direction from top management

focusing attention on learning hot spots

championing sharing and innovation efforts.

Being on the cutting edge

The good news in twenty-first century business is that you do not have to be rich in financial terms to be knowledgeable and competitive. A little ingenuity can go a long way. In the knowledge era, know-how and ingenuity has become the major barometer for national, regional and business wealth. In most developed economies the majority of wealth is now in the form of human capital, intellectual capital and talent rather than physical capital such as plant and equipment.

Knowledge and being on the cutting edge is without doubt the key competitive advantage not only for private sector, but also for all forms of government- and community-based organizations.

The benefits of creating a smarter business can be vast and can include a long list of benefits such as superior insights into customer behaviours, more finely tuned service delivery and repeat business. A better understanding of the marketplace and trends ensures a better cycle of innovation and operational efficiency through a more responsive decision-making process, thereby greatly assisting your chances of being successful by the better use and mix of talent, intellectual capital and customer relationships. This normally translates into a business model where you are doing things better, faster and cheaper.

In saying this, it is understandable why creating a smarter business through a better use of knowledge and innovation does not occur naturally. It is not an easy task to set the agenda overnight. Even a seasoned decision-maker or manager can struggle as they try to make sense of what needs to be done. However, from observing the field for over a decade I believe there are some basic principles that can help in this endeavour.

To start with, good implementation has less to do with cash flow and budgets, and more to do with enterprise and clear thinking. You need to be acutely aware of your business, its operating environment and how you rate in the delivery of service and product performance. The bottom line may be different between corporate, government and community businesses but the need for honest assessment of performance and how you position your knowledge does not diminish. Every business plan needs to deliver a healthy balance of responsiveness and pragmatic action.

Creating a business requires a special brand of leadership that constantly reminds people of the value of knowledge, while making it easier for them to do their job and make a worthwhile contribution. Just telling them to be smarter or more creative will drive them crazy unless you back this up with procedures, methods and processes to help them contribute. In some cases you may need to appoint people to be specialists in the roles of competitive intelligence, knowledge creation and talent management, but more often than not you will need to foster a business culture and attitude whereby everyone sees these outcomes as part of their everyday job.

Needless to say, the leadership of senior management is paramount. To win the knowledge game you need to be much less concerned with cost saving, risk minimization and the bottom line, and be more concerned with the smart use of knowledge, deeper thinking and better application. As discussed, winning the knowledge game needs a sharp focus, motivated people to participate, and systems and infrastructure that are user-friendly. Whatever the state of the economy and your current cycle of business, know-how

is the only thing that will help you move forward.

In this regard, all businesses need to constantly explore three cutting-edge questions:

What are the current capabilities of the business/organization?

What will be the issues facing the business in the immediate future (say two years)?

What are the gaps in your capabilities and what needs urgent attention?

It is worth noting that the suggested two-year time frame may be too short-term in some markets, while in other markets it may be far too long. So your experience is important here. The key to sustaining excellence is patient, strategic and careful intelligence, rather than relying on luck.

Being on the cutting edge requires that different parts of the business are talking and collaborating. Teamwork is everything. You need to organize well-designed consultation and feedback processes so that the latest trends in marketing research, customer satisfaction and business planning are in the engine room of the business brain.

Here are a few examples of how smart observation has helped some businesses to stay on the cutting edge and in tune with their marketplace:

A sales representative noticed a competitor had changed its supermarket product stacking strategy and discussed it back in the office.

A health organization discovered that a recent government study on world trends in hospital infections had found a statistically significant increase in infections in the last twelve months.

An independent study in the mobile phone industry discovered that lead times to answer customer calls were worse compared with its two major competitors.

A government employee discovered that the funding for their department was likely to be cut by 10 per cent in the next financial year.

A business developed a list of web site addresses that gave them a quick weekly scan of their environment, including competitors, existing and potential partners, suppliers, customers and opinion leaders.

Of course, building your capability is one thing, but managers also need to ensure that there is adequate security and counterintelligence. PricewaterhouseCoopers estimated in 1999 that theft of intellectual property cost Fortune 1000 companies US$45 billion. No doubt the figure has grown significantly since then. So it is imperative to have a risk management strategy to defend your trade secrets and proprietary knowledge. This will be explored in much more depth in Chapter 10. However, for now we need to consider what security audits and systems checks may be necessary in your business. This would include limiting availability of sensitive knowledge, screening sensitive conversations, briefing key personnel on security issues, knowing how to handle the media and being prepared to establish confidentiality agreements with your business partners.

When it comes to competitive intelligence a clear policy is imperative, for example, for explaining ethical or legal practices and that there are easy ways to input into the business brain. The input can be helped by producing an easy to use system including simple worksheets to complete, either on paper or by digital means, rewarding contribution and

coordinating ideas on key issues. Remember, knowledge can be inaccurate, biased or late, so make sure you do your double-checking. In some cases, you may find it easier to outsource competitive intelligence to an external provider. However, be careful, as often a third party may not have as good an understanding of your business and you may lose the benefits of cost savings and objectivity.

Sources of your competitive intelligence

As one explores business or competitive intelligence there is a consistent picture that most businesses are quite unsophisticated when it comes to this skill. Research from the SCIP and Macquarie University confirm this is the case, particularly for small to medium-sized businesses which often rely on a small circle of trusted contacts, magazines or newspapers to grow their view of the marketplace.

So what can you do? Depending on your time, desire and motivation there are many sources of building your capabilities in competitive intelligence. The great news is that much of what you need is free and in the public domain, in the form of reports and studies. Then there is a host of software tools that can help you to understand your business, while also providing database access, literature searches and analysis.

So, let us summarize some of the sources of competitive intelligence, ranging from simple access to government and industry web sites in the public domain, to holding private conversations with competitors.

Public domain

Irrespective of your type of business there is business intelligence information that can help you. Examples include, in alphabetical order:

development applications for buildings and extensions to sites

directories, including books like The Almanac of Business and Industrial Ratios and web resources. Examples: www.thomasregister.com, www.rba.co.uk/sources/index.htm and Dow Jones Interactive Web Center at www.dowjones.com

market research companies – including consumer perceptions, retail outlets information, brand and distribution, sales, customer satisfaction, mystery shopping, product image and service quality assessment

patent, trade mark and intellectual property information

public information from businesses themselves – for example, company brochures, annual reports, company accounts, catalogues, buying directories, house journals and newsletters, news releases, web pages, executive speeches, information from trade shows

reports – securities and exchange agencies, federal, state and local government, business councils, chambers of commerce, investment companies (Merrill Lynch), rating services companies (Moody’s), credit reports (Dun and Bradstreet), professional or industry associations, professional publications, business newspapers, local community publications, market research reports, university reports and lobby or pressure groups

World Wide Web – discussion groups, portals and corporate attack sites.

In undertaking competitive intelligence in the public domain you may soon discover that

much of the information you need already exists internally, particularly if you belong to a medium to large business. So carry out a competitive intelligence audit of your internal sources of competitive intelligence to ensure you are not reinventing the wheel. You will most likely be surprised at how much useful data is actually lying around gathering dust in the form of printed reports, computer files and other studies.

Also with the emergence of search engines on the Internet your searching of public information has become so much easier. However, be careful, as much of what is on the Internet is often lacking independent review and credibility. In some cases you may decide to pay to get the best and most reliable information. Here fee paid services are increasingly being provided by organizations such as Reuters, Associated Press, Dun and Bradstreet and AC Nielson, to name a few.

Private domain

Having explored the public domain you must also seriously consider holding conversations with those people who can give you the most precise and powerful intelligence on your marketplace or business.

In this case talking to staff, customers and contacts in the field is a prime example. Often this form of intelligence is not on public record but their insights can be very useful, to say the least.

Private comments and disclosures can come from a variety of sources. Within your business you may have people who can help you. However, realize from the start that a person’s opinion can be prone to error, so tread carefully. To gain the best value from this know-how you will need careful training, briefing and reporting systems.

Ethics are very important here and it is my strong recommendation to avoid theft, bribery or misrepresentation. For example, how would you approach a person who is now working with you, who in the past worked for a competitor? How would you frame the conversation so it is ethical, lawful and will not cause harm or compromise the person? In this regard, you may revisit the code of practice from the SCIP and the ‘gut test’ detailed in the Introduction to this book. This will help your business respond better to any ethical dilemmas you may face.

Typically the most accurate sources of private domain knowledge are employees, suppliers or customers working within the business under study. The key here is to ensure that the conversation is not threatening and does not place them in a difficult position. So be transparent, keep it simple and do not ask for highly confidential and precise information. People often will reveal vital information that is not seen as confidential, particularly when they feel the exchange is one of mutual benefit. Better to have your contacts giving approximations and generalizations than forcing unlawful disclosures. It goes without saying to be prepared in advance, this form of intelligence gathering takes tremendous skill and practice to perfect.

Other sources of external private domain research could involve contacting journalists, ex-employees, other players in the marketplace such as competitors and consultants, and many of the people who are listed in the public domain categories, for example professional associations and market research companies.

Communicating your direction for knowledge work

Apart from being aware of competitive intelligence and what it takes to be on the cutting edge, it is imperative that you establish an engaging and powerful argument for change. This articulation helps set a target in which people can organize and tailor their behaviour, priorities and learning. How you choose to tell your story or direction will depend to a large extent on the personality and receptiveness of your people.

Here are three approaches for communicating your direction. The final choice or mix will again depend on the nature of your business and how you can grab and hold people’s attention.

One popular way to help communicate direction is for leaders and decision-makers to articulate what their priority business needs are. The benefit of doing this is that it gives a sharp focus for knowledge work and innovation. As you would expect, the measures can be very idiosyncratic depending on the business. In a public health business such as a hospital, the needs could be as simple as saving lives. Alternatively, you could choose a host of other metrics such as better response to patient needs, minimizing infection, helping patients feel a little less lost in the system in order to help provide a measuring stick for growing competitive advantage or contribution to society.

If you were studying an international consulting organization like Ernst and Young, the drivers for improved knowledge work would include smarter use of existing knowledge, higher customer satisfaction and attracting and keeping talent.

Other common metrics in use in many businesses include:

increased productivity and profitability

reduced time for a product or service to enter the marketplace

reduced wastage, error and duplication

greater social responsibility, duty of care and environmental management

stronger alliances and relationships with business partners.

It is also worth noting that the measurement and evaluation of knowledge will be discussed in Chapters 14 and 15.

The second way of helping shape a direction for knowledge work and innovation is to communicate a vision of the future. Here you develop a story of what your future will look like if you act as a smarter business. The two examples from Buckman Laboratories and Hewlett Packard show how a short story can have enormous impact. In both cases, the visions have had a profound and lasting impact on how these businesses have progressed in the area of knowledge work over the past decade.

Bob Buckman, the CEO at Buckman Laboratories, in 1988 provided a template for the future of the business by spelling out what he was expecting in the area of cutting-edge knowledge work. He wanted a system and knowledge management practice that met the following criteria:

It would be possible for people to talk to each other directly to minimize distortion.

It would give everyone in the company access to the company’s knowledge base.

It would allow each individual in the company to enter the knowledge into the system.

It would be available twenty-four hours a day, seven days a week.

It would be easy to use.

It would communicate in whatever language was best for the user.

It would be updated automatically, capturing questions and answers as a future knowledge base.

Within a division of Hewlett Packard the senior leadership of their consulting team developed this vision:

Our consultants feel and act as if they have the knowledge of the entire organization at their fingertips when they consult the customers. They know exactly where to go to find information. They are eager to share knowledge as well as leveraging others’ experience in order to deliver more value to customers. We will recognize those consultants that share and those that leverage others’ knowledge and experience as the most valuable members of the HP team.

As you can see both case studies provide a structure by which people can shape their behaviour.

The third approach to shape the direction for knowledge and innovation is quite different. Here you describe the behaviours that are no longer acceptable. This identification sets in place criteria or a benchmark for monitoring unsatisfactory performance, particularly if this intention is backed up by reward and recognition systems that encourage better behaviours and discourage serious neglect.

A list of undesired behaviours could include:

Great ideas are not shared with the people who matter.

Mistakes are repeated because they were never recorded and learnt from in the first place.

Vital knowledge is stored by too few people.

When people leave the critically important wisdom of the business is lost.

People struggle to find out what is known in the business. They are unable to plan.

There are limited opportunities to share wisdom across the business.

There is no innovation, training and skill development.

Control and command dominates.

Customer relations are poor.

You always win sales by dropping your price.

Having identified these behaviours, you are then much better placed to undertake regular reviews of shifts in performance levels to measure improvement, deterioration or the status quo. Here testimonial quotes can also be a wonderful supplement to the review. Real-life testimonials or narrative stories can give enormous weight and substance to the view that positive change may be occurring. This process of digging up the real-life proof will be explored more in Chapter 7.

Knowing the learning hot spots

To summarize the message in this chapter so far, creating a smarter business requires quality business intelligence, observation of performance and clear direction. If your business does this well you are much more likely to identify the important hot spots or areas for knowledge improvement. As each hot spot is addressed the business can then move on to the next, and so on.

Clearly, if you wish to get individuals to ‘buy in’, the business must communicate why addressing these hot spots is important. People must see that learning about hot issues is meaningful, real and important work. You need to grab their attention by stimulating their curiosity. On a personal level you may need to stress the benefit of working and learning about these issues. Other personal benefits may involve enhancing people’s reputation, employability, feeling of acknowledgement, development of mutual respect and making people look good. Likewise you may also link the broader benefit to the business, customer or society. Needless to say, the benefits can be both large and diverse.

The key here is about maximizing contribution to knowledge and learning and not about living out a prison sentence. Forced contribution has a very low success rate, as well as generating hostility or passive resistance. So go for short bursts of innovation rather than long and protracted involvement.

As discussed in Chapter 4, depth of thinking is also vitally important. Encourage people to keep journals and to contribute to archives of knowledge on the hot issue under investigation. If you have access to digital software you can use it to encourage people to answer and help each other. Again, practical assistance can help people contribute; instead of having vital people spending hours proofreading and editing text, get others to help them to do this. Remember, forcing people to contribute will at best only reduce tokenism. You must gain their permission, trust and goodwill.

Where you face resistance by people not wanting to help or offer assistance, you may wish to explore the following questions to increase their involvement:

Do you know why this issue is so important and what it involves?

Do you know how easy it is to help?

What needs to change in order for you to continue?

What other issues need to be discussed first, before you are ready to commit?

What happened last time you tried to share or contribute?

What could we do more of to encourage you to participate differently?

What are you concerned about losing if you shared or contributed?

What would you see are the benefits of sharing or contributing more?

Are you prepared or interested in being part of the solution?

You will find these questions will help clarify misunderstanding as well as bring to the surface hidden tensions or concerns. Also, you may need to consider conducting formal

training and coaching to clearly demonstrate that sharing knowledge has merit for both individual and business benefits. Of course, when you design the training make sure it embodies the principles of knowledge sharing and celebration, as opposed to being a formal lecture where the opposite dynamics are usually the case.

Gluing the lessons together

Here are eleven observations to help summarize the topic area as well as serving as a good precursor to various discussions that will unfold in the remaining chapters:

Creating a smarter business requires total commitment. In most cases the impetus for change comes from a recognition that the competition or business landscape has moved on. Through closer scrutiny of customer relationships, industry trends and early warning signals, a business has a much better chance to respond.

Each manager needs to champion the flow of ideas. When key findings of know-how are discovered, important decisions must be shared in a timely, credible and ethical way without hurting the business. Normally this means ensuring key messages are clearly communicated to help understanding, application and review.

People need to be convinced that both the individual and business will benefit from winning the knowledge game. People are too busy to be sidetracked to do a meaningless activity. You need to take the mystery out of such terms as knowledge management, learning organizations and business excellence, and create maximum opportunity for learning on the job.

Effective implementation is achieved by focusing effort around a few hot learning topics rather than trying to do too much. Then make sure you are supporting and nurturing discovery and innovation in these areas as much as possible. Ensure that the learning is captured and shared with the right people at the right time.

When it comes to IT this must be about connecting people. Chatting by e-mail or having a meeting on the web does not automatically mean you are engaged in knowledge sharing. You need to make sure good ideas are put into practice.

People must understand that they need each other and that sharing of knowledge expands possibilities rather than narrows them. People should be encouraged to set up informal discussion groups to exchange lessons learnt and tricks of the trade.

Sharing stories is central to growing know-how and business capacity. Actively encourage people to share testimonials, stories and observations at every opportunity, whether it is when coaching or when leading a meeting. It is here where deeper insight and awareness is unmasked.

Management technologies and analytical tools are also of great assistance to winning the knowledge game. Popular models used extensively in business include balanced score card, business excellence frameworks and six sigma.

Every knowledge exchange needs to be prepared for and reflected upon; success does not happen by accident. Encourage collaboration and teamwork whenever you can. You can even consider redesigning your physical workspace to encourage greater sharing and openness via the floor plan.

When you are struggling for talent in your business, look for innovative ways to build your capability. These include buying in expertise, hiring new employees and forming joint ventures. Similarly, seeking help from consultants, suppliers and industry associations could be a sensible way of proceeding.

Consider incentive plans to encourage people to create and apply their knowledge. Some workplaces link knowledge management into their performance management agreements. Others reward the knowledge sharers and innovators by inviting them to attend special events or gatherings. Most important of all, you need to send out the message that you are serious about winning the knowledge game.

Summary

Creating a smarter business requires you to carefully understand your marketplace, your environment and performance. To do this you need a clever combination of intelligence gathering and security. Having done this you will be able clearly to set and modify the direction required. You then need to glue all this together with a common infrastructure, incentives to share knowledge and a clear focus of what are the hot issues that can help drive and grow your competitive advantage. There is no single cure; you will need to deploy a range of consistent and aligned strategies over time to succeed.

Chapter 7: Spreading a Knowledge-Sharing Virus

Overview

Systems emerge as individuals decide how they can live together.

(Margaret Wheatley and Myron Kellner-Rogers)

Spreading a knowledge-sharing virus requires:

much higher levels of co-operation

personalizing a word-of-mouth campaign

less fuzzy rhetoric and more real-life examples

balancing the conflicting needs of security and freedom

digging out the unsaid and unspoken.

Stimulating a team approach

Businesses are inherently political in nature, full of people seeking to serve their own agendas, views and needs. Sometimes business politics can help growth and success but, more often than not, it causes the opposite outcome where people spend more time infighting and protecting territory than sharing ideas and growing capability.

In many ways one could easily argue that winning the knowledge game has more to do with handling business politics than being at the frontier of best practice. This viewpoint strongly mirrors my observation that the knowledge game is highly political in nature and there is a strong connection between political influence, power and flow of knowledge.

So, how do we respond to business politics? It is my view that, instead of being deplored by such behaviour, we need to see politics as a natural part of life. Sure we may not like what we experience but, instead of being paralysed by what we see, we need to invest in more creative ways to inspire people to try a different code of behaviours, particularly by raising the levels of teamwork and shared purpose. We may not be able to easily change the psyche of people but we can skillfully raise another view, which could lead to different habits being entrenched and, hopefully, spreading of a knowledge-sharing virus.

When it comes to working with politics it needs to be accepted that people will bring to the table widely different motivations, mental models and assumptions. For example, with regard to learning and innovation there is a wide array of perceived benefits. Senior management, on the one hand, may view the growing of knowledge as a strategic issue, one that needs organization-wide commitment. Employees, on the other hand, may view knowledge as something that gives them personal recognition or helps them to do their job more easily. However, a specialist in IT may be motivated by an entirely different value system such as one that could involve implementing the very latest communication and digital technology capabilities into the business. Alternatively, a practitioner in human resources may be more interested in issues such as training support, resistance to change and consultation rather than a pure technology-based solution. With such diversity of opinion it is very easy to see where the many sources of political tensions and agendas can arise. Left unchecked, different views can quickly paralyse any change effort. Of course, such tribal wars are not restricted to these professions and roles. Baggage often comes with the territory, whether it is indoor versus outdoor staff, head office as opposed to regional office, or the common clashes of finance versus marketing or research and development versus manufacturing.

To glue together a team effort you will need to stimulate high levels of co-operation. You need to move past egos, including your own, and pull together in one direction for any change to succeed. You do not want them looking for the exit row and escaping when things get tough. To help remove mystery and suspicion there must be easy and safe ways for people to contribute. Time needs to be given to clear up expectations and find a common language. Ignoring political conflict will not help, you need to be courageous enough to get the parties together and look for common ground. This advice also goes for relationships with suppliers, consultants, vendors, joint ventures and customers. It is imperative that the right mix of representation occurs, especially in a topic like winning the knowledge game where so many people can have a stake in its success.

Seven behaviours can improve your chances of political co-operation:

1. Never assume you have common ground, work hard to a shared purpose.

2. Encourage people to say in safety what they are thinking.

3. Promote fluid and spontaneous exchange of ideas.

4. Remind people that if they think they know it all, they are kidding themselves.

5. Support people to ‘hang in there’, even when things become heated or they feel hurt.

6. Make sure people are involved in important decision-making and clarification.

7. Constantly reward and thank people for their efforts, without patronizing them.

Such teamwork will not come easily, it requires leadership and skilful facilitation which sparks people into action by unleashing spirit, passion and a desire to contribute. At higher levels of co-operation people are required to challenge their assumptions and listen to each other, and that is often not easy. Similarly, if a department or professional wants to take governance or control over a change this must be discussed.

Shaping public opinion

How well you shape public opinion and word of mouth will ultimately determine whether you will gain commitment to any change. This is particularly the case in knowledge and innovation. People need to personally understand why and how better knowledge adds value.

Here, relying solely on logic and economic argument is not enough. People need to experience a meaningful exchange, which stimulates higher levels of trust and makes them feel vitally important. A common area where this mistake occurs is between a manager and his or her staff. Unless the manager coaches with a genuine desire to build talent for mutual benefit the relationship will soon lose impetus. All the words in the world will not make a scrap of difference if his or her heart is not there. Relying on correction, control and micro-management is a certain recipe for turning off the flow or sharing of knowledge in any manager– staff relationship. So be ready for change yourself if you are going to have impact in shaping public opinion in any business.

A much better way is to earn people’s respect and commitment. Managers need to recognize that this is not something you can impose or conscript; you need people to volunteer both their time and interest. If a business is only out to benefit its own cause, people will quickly see through this and resist. Unless you lead from the heart and seek to address areas of mutual need you will struggle to progress in stimulating improved knowledge, innovation and performance. This lesson of leadership is relevant to any form of human interaction, but is especially true in business.

So avoid waging a war against an entrenched culture and bruised egos. You need to build a partnership where the business conditions make it easier for people to contribute, be listened to and valued. In the world of dealing with human emotion, reputation, promises and loyalty mean nothing if you are not backing this up with a genuine desire to be helpful, fair and transparent.

As a CEO you certainly need to keep an eye on the budget and ensure smart allocation of resources, but you must also be prepared to champion the cause of circulation and application of talent whenever possible. Growing competitive advantage is about helping people to find out what needs to be developed, learnt and tossed out, and make it easier for them to get on with the job in a smarter way.

The fact is if working together comes down to who is right and wrong you will only sow the seeds for discontent, token compliance and hostility. Gaining commitment and shaping public opinion takes time. It is not a single one-stop solution. Be prepared for a pursuit that will require a diversity of tactics and ideas. Whether you are aiming to gain big leaps in support, or you are following a more cautious approach, be prepared for a journey full of surprises, intrigue and great learning.

To help shape public opinion ensure you:

sell a clear compelling case for change

involve people in meaningful dialogue

make sure mistakes are learnt from rather than jumping to punishment

ensure people feel appreciated and know how to contribute

reward and market prime examples of good knowledge work

have a development focus that supports and encourages learning

constantly review and celebrate your progress.

In addition, develop the skill of personalizing word-of-mouth and marketing campaigns to different audiences. For example, for the more innovative people in your business you may need to highlight how this proposed change is fresh, ground-breaking and will help them stay ahead of the pack. Others will require clear proof that an idea has merit before they are prepared to commit themselves. They also may want to know that the idea is practical, achievable and user friendly before they will give you their time and effort. Finally, you may need to convince others of the potential loss if they fail to grab the opportunity. Having clear demonstrations of tried and true methods certainly helps, particularly if they are backed up with proof that others are already benefiting.

Such a range of possible messages highlights how important it is to sell the benefits in a careful way. This means positioning your message in less abstract, risky or complex terms. Sometimes the obvious is much better than the appealing. Here creditable testimonials and stories on what is now working, or what has worked in the past, can often help sway the public opinion in a positive direction.

Most important of all, support people to explore their options and consider alternatives in safety without fear of retribution. In doing so you will increase the chances of surfacing the hidden fears or tensions that may be consuming them. From there you are much better placed to move forward together.

We also must be sensitive to the fact that people are often more emotionally connected and loyal to their work groups or teams than to the business. For many, the concept of what makes up the identity and boundaries of your business is a very abstract or hard to connect to concept. People are more likely to be loyal to their work team or department particularly in medium to large businesses. The result being that loyalty is more likely to be a group concept, rather than one in which people feel obligated to a total business or workplace. If you expect loyalty you will need to convince people that not only are they going to benefit as individuals but also the team in which they work will also see a reward.

To help explore resistance to change, here are a series of questions you may wish to consider, when holding your next conversations:

What is your understanding of what is happening at this time?

What is your past experience of such initiatives?

How hopeful are you that this change will be a success?

Why do you believe this change is seen as important?

What do you fear if you try this change?

What are the advantages or disadvantages of this change?

What do you think I need to understand about your views on this matter?

How can we work better together on this?

Digging up the best proof

If you wish to accelerate acceptance and buy into winning the knowledge game, managers and their businesses need to dig up proof. We need to steer clear of fuzzy rhetoric and jargon, and paint a vivid picture of what is possible. The best way to do this is to share a story or a testimonial that puts some meaning to what is required. So avoid abstract concepts and provide concrete examples!

Stephen Denning in his book, The Springboard, discusses how in the World Bank he shared stories to help create a knowledge-focused organization. He found that sharing short narrative stories helped people quickly to relate to what was being said or proposed.

One of Denning’s popular stories started with the following twenty-nine words: ‘In June 1995, a health worker in Kamana, Zambia, logged on to the CDC Web Site in Atlanta and got the answer to a question on how to treat malaria.’ This short story of what a person actually did provided a powerful mental framework to decision-makers and staff on what knowledge sharing is all about. It also gave the listeners the freedom to explore countless possibilities in their own minds on what this story meant to them and how it could be applied. For example, Denning discussed that a person may reflect on this health worker story as follows: ‘Suppose I was part of such a network of like-minded and sharing professionals. Suppose that I had access to such a service. I could be more productive. I could help my clients and provide faster better services. I would have a solution. Suppose . . .’

Taking Denning’s advice a little further, such proof can provide the evidence that a new or different way of doing something is not only possible but it is already happening. It also provides a catalyst for deeper exploration of and insight on possible consequences and benefits of change.

So, if you have not done so already, start collecting stories of real people and real situations, and use them to stress or support a change or a new way of thinking. Also as you walk around the business or connect with people, make a careful note of what is being said, what is being learnt and the assumptions being generated. Use personal accounts and testimonials where you can. Better still, encourage people to tell their own story in public or in an appropriate marketing campaign. Such evidence can add enormous creditability in any change. You will soon discover that well-chosen case studies and stories will not only captivate interest but will help shape public opinion. People will begin to see how the future or the current realities could be shaped differently, without their egos being dented or their images being tarnished.

The beauty of stories is that they are quick and easy to use. As Stephen Denning points out, people do not need a long detailed explanation; all they need is a short well-spoken narrative to get them thinking. My guess is you will have many stories already, so place a series of thirty-word narratives in a personal archive for future use. Then, when prompted, tell more about the meaning and message behind the story.

Of course, storytelling is not foolproof. Stories can go astray, particularly if you fail to consider the needs of the audience and the key message you are trying to convey. So rehearsal and forward thinking is essential, with a little intrigue and good timing people will more likely tune in. When it comes to storytelling you may not be able to control where they go in their own minds so take the time to explore the observations, conclusions or

thinking that have been generated. Then you will not only be generating more curiosity and attention, you will also be taking everyone’s learning to a new and different place.

Keeping the electricity flowing

The greater our ability to generate a flow of ideas between a network of sharers, the greater the potential for breakthrough thinking. Being isolated in the twenty-first century knowledge era is a recipe for certain business stagnation.

It is imperative that we are clear on how our behaviour impacts on how the knowing-sharing virus continues. For example, when we turn on the flow of electricity in our home, the divide between what is on and off is very stark. Similarly the on/off switch for the flow of knowledge sharing is equally stark and self-evident. Depending on how he or she leads, coaches and manages, a manager can stimulate flow or can cut it off at a moment’s notice. So, remember the on/off switch and respect the needs and motivations of others.

Let us remind ourselves of some of the principles already discussed. If we wish to promote sharing of knowledge, business needs to radiate trust and receptivity. Knowledge work needs to be encouraged as a normal part of daily activity, and not an extra task to do at the end of the day. We need to agree to goals and identify hot issues that require attention and give people meaning. Knowledge work needs to be planned for and rewarded. Most important of all, we need to be respectful of people’s time and effort, whatever the outcome. In times of such rapid change there are a multitude of reasons why people may choose not to share their knowledge, and we need to understand that before trying to force participation. My feeling is that most people already know deep down what it takes to share but they rarely talk about it. If you build a track record of being a knowledge sharer, you will in time find the right connections. In doing so, you will also earn vital respect and integrity by showing your gratitude for people’s time and effort.

As discussed in Chapter 11, IT is also a great help in opening up new networks and building a spirit of collaboration and sharing. However, technology by itself is not the answer; it is just a mechanism and a tool. We need to back up the technology with human processes that personalize relationships and make people feel valued and appreciated. When this occurs we have the best of both worlds, one where there is an ease of communication and frequent exchange.

Finally, if we wish to keep the electricity flowing, we need to respect how people feel, in terms of personal security or freedom. If either come under threat the person will often withdraw and resist any new requests. So, be aware that if people feel their future is threatened they will most likely choose not to help out. This perceived or possible threat may need to be acknowledged or discussed before any progress can be made.

Turning silver into gold

Our knowledge is related to context and experience. Just because someone is successful in one business venture does not mean they will automatically succeed again or continue to succeed in their present situation. Our ability to resolve something depends to a very large extent on our ability to apply the right learning and insight to the right situation.

This quirky relationship between context and knowledge poses fascinating questions about how we change our habits, grow our experience and expand our know-how. First, how skilful are we at exploring and reviewing our habits and self-imposed limits? Second, how talented are we at learning about what is hidden, forgotten or unknown? Third, how do we communicate our know-how in a simple and understandable way?

No doubt these questions raise a number of tensions in human communication. Even with the best of intentions and techniques of knowledge sharing, communication is not foolproof. As soon as someone tries to communicate something they lose part of their message or insight. You best see this when people try to write down an idea. It is very difficult to capture everything in a letter, an e-mail or a book. Even then, we have to expect that some of the material you share will be incorrect because it is based on inappropriate assumptions, context and facts. As a result, people need constantly to test and question their wisdom while also being prepared to explain the assumptions behind each story or message.

Getting our knowledge out is one thing but having it accepted or understood without modification is another. So we need to follow up to ensure that it is known, clear and acted upon. Our innate ability to question knowledge at all levels will ultimately determine whether we are able to transform an idea from something that may have a silver lining to something that is golden.

In this regard it is important to understand the difference between what is called explicit and tacit knowledge. Explicit knowledge is know-how that can be written down. It normally takes the forms of checklists, formulas or procedures. Tacit knowledge is wisdom or know-how that is locked in our mind or body.

For example, if you asked me to tell you about where I live in Sydney, I could detail a number of facts about my suburb but I would also tell you about my experiences. It is here, in the stories of my experiences, that you would move into my tacit knowledge. If you probed me you would discover more and more about the area in the city where I live and my own unique experience. It is here where you discover much deeper awareness than just facts. It is quite likely you could interview me for days and not touch the surface of what I know, not because I am especially smart but because in my mind are millions of stories and experiences. This tacit knowledge is priceless because it comes from direct experience.

Let us take the example of the Sydney Olympic Organizing Committee for the 2000 Olympics Games. At the completion of the Atlanta Games in 1996, the Sydney Committee decided to acquire many of the files from the running of the USA games. On the surface this pile of information was very useful, but much of it was not. Many of the systems and procedures were similar but the context was different, and that made much of the transfer of know-how difficult. What helped more were the real-life visits of Sydney

staff to Atlanta, recording videos and audio tapes, observing what was actually happening and attending an aftergames debrief.

As you would expect tacit knowledge can take various forms. It could involve personal approaches to situations or problems, including how decisions are made and in what order. It could detail deeper wisdom behind routines, standard operating procedures and intellectual property. Tacit knowledge could be body and minds skills which require practice to master, for example, how to lead a group discussion, how to tile a bathroom or swim breaststroke. People can read about these skills but it is the practice and experience that grows their capability. Finally, there are mental models or schemes where people have developed a framework to make sense of a phenomenon or some hard-to-grasp situation, for example, how to manage hostile customers or how to cope with stress. When you quiz someone about this level of tacit knowledge they could supply you with a list of possible frameworks, metaphors or theories that help them deal with the situation being discussed. All of these could be vitally important to a business or a career.

The difficulty in extracting tacit knowledge is that much of it lies dormant in our minds and is often left unsaid. If you wish to reap the benefit of deeper tacit knowledge, people need to become skilled in digging out this deeper ‘know-how’. Of course, some of this knowledge may be highly confidential, so this issue would need to be discussed beforehand. However, by making an extra special effort to record, observe and write down tacit knowledge, you can start to understand what and why people think as they do.

There are numerous ways to help the sharing of tacit knowledge. Here are eleven examples:

Have people tell relevant stories, saying what they did and what they learnt.

When you are coaching, think aloud. Share what you are exploring and why.

Write down the history of an important experience. Then discuss the thinking and insight that came from each stage of your story.

Write a case study based on a real-life situation. Then have a team of people explore their approaches to the situation.

Do plenty of reviews of what is actually occurring during an experience.

Encourage people to share their new understanding when they are experiencing new knowledge.

Use experts to develop models or frameworks from people’s tacit experience.

Watch how others interpret and experiment with an idea. If you are the originator of the idea you could gain more insights.

Take a theory or a hypothesis and test it. Take abstract notions and hunches, and dig around and see what works or does not work.

Set up informal chats and dig deeper into what is on people’s minds. Free-wheeling conversations provide wonderful anecdotes and ways of thinking.

Organize knowledge fairs to explore thinking, work in progress and to test assumptions. The greater the cross-fertilization and collaboration the better!

Finally, when it comes to simpler explicit knowledge, ensure that the knowledge is properly codified and accessible to the right people. Having a large database of lessons learnt can be useful but it must be well organized and easily retrievable. A large reservoir of stored knowledge is worthless unless it is put to use and is frequently updated and improved.

Summary

There are many ways a business can increase commitment to knowledge sharing. First, the business planning process needs to bring people together from diverse backgrounds to discuss how you can make the change work. Second, you need to sell the case for change by communicating stories and evidence that show what behaviour is expected and what is possible. Here real people and testimonials work best. Third, you need to circulate knowledge by making it easy, safe and mutually beneficial. You need to perfect the art of digging out deeper tacit knowledge in a way that it has meaning and value to others in the business. Most important of all, you need to accept that even with the best intentions in the world, knowledge sharing is not a panacea as it is often subject to biases and bad conclusions. So, constantly question and explore conclusions, assumptions and findings before assuming what you experience is correct.

Chapter 8: Riding the Waves of Change

Overview

We are drowning in information and starving for knowledge.

(Phil Harkins, Louis Carter and Amy Timmins)

Riding the waves of change requires:

leadership that inspires confidence and hope

auditing how the business communicates

knowledge enhancing customers, suppliers and contractors

linking business, individual and team thinking

a regular review of knowledge assets.

Saving people from drowning

Like many people, I love to go to the beach. Whether swimming or watching from the shore, I often marvel at the temperament of the sea. Every minute seems like another episode of life. For one second the sea can be calm and tranquil and then without notice a large wave comes roaring towards the shore. If you are swimming you need to contend with these surges and changes around you by staying afloat and being relaxed and confident in the water.

Similarly, when it comes to winning the knowledge game we need to be ready for the next wave of change that comes our way. On personal, team and business levels we need to constantly scan the horizon, ready to respond to what is happening around us. At times, you may feel a little out of your depth and swamped by the next wave but if you can remain calm, hopeful and alert you will live to fight another day.

In a twenty-first century business it is also easy to be drowned by information, by the sheer volume of directions and messages bombarding you. For example the US Department of Commerce now estimates that the Internet is doubling in size every seventy days. In business the message can be the same. At Xerox, for example, it is estimated that one of their computer databases alone currently holds in excess of 30 000 records of information.

Research at Northrop Grumman has shown that, even with the help of the World Wide Web, people are struggling to connect with those whom they need in order to do their job. Northrop Grumman estimate that, on average, knowledge workers can spend six weeks per year searching for experts to complete their work. IRN Services estimate that information professionals can spend up to fifteen hours per week searching for information on the Internet, with their searches only perceived as 44 per cent effective. This evidence shows that staying afloat in an information society is an immense challenge. It is interesting that, even with elaborate search engines and latest software and technology, people are struggling to stay informed and up to date. So, if any business or manager can help its people, customers and business partners to handle these stresses they will love you for it. This translates into creating business systems that are clear, user friendly and supportive. Decision-makers need to take every opportunity to assist their people to regenerate and consolidate. This is particularly the case in tough times, when it is very easy to feel a little wounded, fragile and burnt out. As when we are swimming in the ocean, we need to help people to stay afloat and enjoy the experience.

Removing the veil of secrecy

As discussed, businesses are not always the haven for winning the knowledge game. They are stuck with trying to second-guess what is happening, planned and learnt. This is particularly the case when secrecy, hearsay and bullying are feeding how a business operates.

To help overcome difficulties we need to expose those behaviours that are causing damage. The more transparent and honest the conversation, the more likely home truths will be discussed. This is not about running a propaganda campaign, but is about giving people meaningful feedback on what is the current state of play. This information needs to be placed in the hands of people who can suggest ways of proceeding.

When the plans and actions are decided managers need to back these up with well thought out and reviewed communication strategies. Choosing what to communicate is never easy, but from experience the answer is more often rather than less. Lend Lease Corporation is a global business that works hard to share the state of the business and to inform its people what is happening. Like many other organizations it publishes the company news for each day on its web site. The goal here is not to drown people in information but to feed them mission critical knowledge. Government organizations such as the Australian Bureau of Statistics have daily updates of corporate and team news.

So, whatever your business size or type, make it your job to audit the quality of your communication process on a regular basis, whether it is hit rates on new web pages or feedback from what people learnt from a staff meeting. Communication audits can take various forms, ranging from conducting formal surveys of your people’s perceptions to vetting whether the key corporate messages are known and understood.

Here again the role of managers and team leaders is vitally important. If they do their job properly the business will work so much better. Remember to be very clever in how your business grabs and holds people’s attention. In this fifteen-minute world it is very easy to become sidetracked.

In addition, it is worth noting that medium-sized to large businesses are increasingly appointing communication managers to keep an eye on the flow and quality of knowledge. This appointment, if conducted correctly, should improve the quality of communication and assist better decision-making.

Sponsoring connection and interactivity

Most best practice businesses pride themselves on the interaction among their employees, customers, suppliers and, increasingly, competitors; the result being higher levels of know-how and stronger business performance.

Business to business (B2B) e-commerce is a modern-day example of how close connection and better interaction is leading to improved competitive advantage. McKinsey and Co. estimates that B2B transactions will be worth over US$1.4 trillion worldwide in 2003, with the Asia Pacific accounting for 20 per cent of this figure. The research group, Jupiter Media Metix, estimates that by 2005 this figure will have grown to US$6.3 trillion, where 42 per cent of total sales will be done via the web. So, apart from the benefits of exchanging knowledge, there is staggering growth in business transactions such as tendering and ordering products and services.

The growth in web-generated B2B e-commerce is based on the economies of scale that come from seamless transactions between suppliers and businesses. Simple examples could include expanding your expertise in the marketplace by sharing know-how, obtaining faster and cheaper services such as a printing job or buying new versions of software. Business has certainly moved a long way from just ringing a contact from your local telephone directory or relying on one trusted referral. To be competitive in today’s workplace a web presence has become an essential.

As you would expect, the types of web-enabled B2B alliances are diverse and in constant flux. The key players change on a daily basis. However, there are a number of broad categories worth exploring, beginning with businesses that help suppliers and buyers to find each other, like eBay. Then you move to other types like Amazon who are a clearing house for goods and services. There is Expertcentral, which assists people to share ideas or ask experts for opinions. Businesses like Cisco Systems connect customers, partners, suppliers and employees in a global supply network by giving immediate access to supply and demand information in a host of areas including manufacturing, finance and design. Fedex helps people to get the latest information on delivery and distribution. If you are an architect, contractor or professional and wish to share documents and conversations on such issues as large construction projects, Buzzsaw may be for you. No doubt in the years ahead this avenue of assistance and service delivery will expand into many more categories and features.

Of course, connection and interactivity is not just business to business; it could include employee to employee and business to customer. The size and scale of the Internet offers the potential to anyone to have access to millions of possible contacts and opportunities. Depending on your interest, anybody can join a discussion group, join a chat room, send an e-mail or connect with someone new. People no longer have to wait to get an answer; we all have an opportunity to be free agents for our learning.

However, with this access comes responsibility to ensure we are not abusing the privilege. When seeking our answers and exploring new pathways of knowledge, integrity and ethics are very important. For example, not overstaying your welcome, dumping junk and unsolicited advertising on people or deploying careless language can quickly destroy potentially worthwhile e-relationships. A little respect and graciousness can go a long way.

Finally, it is worth noting that web-enhanced business-to-customer (B2C) relationships are

explored in more depth in Chapter 12. But for now it is important to introduce the concept of building a customer relationship based on greater openness and learning. I know from my consulting business that close relationships are the most important ingredient of success. Without close and intimate sharing of knowledge I would never grow and develop. In many ways business success is directly linked to how knowledge-enhancing contacts are obtained, nurtured and maintained over time. In business this notion can be extended to business interfaces with other parties, whether they are suppliers, contractors or business partners, while not forgetting the wonderful value of knowledge-enhancing employees as well.

Opening up networks and shared advantage

In modern business there needs to be a strong linkage between individual effort, teamwork and organizational objectives. The more aligned this relationship, the better the chance for ongoing excellence and innovation. In business a range of people management strategies can be used to keep the best talent, including careful recruitment, good training and regular career development discussions. By using these strategies you will help create fertile ground for opening up networks, a flow of knowledge and shared advantage, all of which are essential if you wish to stimulate a work attitude and generate competitive advantage.

There are a number of ways to open up networks and share the advantage of knowledge. Here are five of my favourites:

Be spontaneous, tell stories over breakfast, lunch or a coffee but do it in a relaxed and friendly way. If you have a tearoom, spend a little money on paint and decorations to give it an informal and inclusive atmosphere. I know a manager who even invested in a mini-refrigerator in the office so people would come in and chat over a cold drink. What a stroke of genius, and it worked!

Have people brainstorm their ideas on what could be done to free up the level of sharing and exchange in a business. Ask for feedback on the following questions: how can we better transfer what we know or need to know? How can we make knowledge more accessible and more interesting to people? How could we better grab attention and involvement? Which methods and systems are currently in use? How can we use this better? Which practices, rules and behaviours kill off innovation and the flow of knowledge? Where should we start? How will we review progress?

Create simple ways for people to input their discoveries and questions. This can often be assisted by having peers working together on the material and having third parties review the work. Decide which knowledge is easily recorded and written down (that is, for checklists and quick tips) and that which is more tacit or complex in nature.

Open up access to the Internet and encourage people to apply what they learn from their discoveries and feed it back into the business. Create home pages which connect people and their wisdom. Place communities of practice, mentors and knowledge archives on the home page. Reduce the emphasis on information and increase the emphasis on knowledge. Where possible, have people meet face to face or use technologies like video and telephone conferencing, web cam and file sharing software to stimulate collaboration. Assist the cause by providing a series of incentives. British Telecom have in the past given a monthly reward system for knowledge sharing, including small monetary awards to the most prolific provider of valuable knowledge on the intranet. Another reward was for the person who answered the most queries in the ‘ask me another’ folder on the Business Home Page. Yet another was given to the person who provided the most valuable piece of knowledge.

Encourage people to be actively involved in organizing and presenting knowledge-sharing events. These can range from simple and inexpensive gatherings over sandwiches and soft drinks to major extravaganzas involving holiday resorts or hotel venues. Remember, expense is not the barometer of success and that the creativity, stimulation and mutual support that come from such gatherings are far more important.

We can never fully anticipate what will happen when we ask people to interact and share knowledge. It is imperative that you anticipate any potential conflicts that may occur. Be sure you set workable expectations from the start, but you do not want people to be paralysed by them. All the e-mails, web sites and conversations need to lead to something tangible and worthwhile. Somewhere along the line someone needs to take a stand and summarize what is being learnt and to give feedback on what is not working.

For example, in project teams people can be so nice and polite that they struggle to make headway. A team leader can easily create a nightmare democracy where people are so consultation crazy that nothing ever eventuates. At the other extreme, a process can quickly suffer from a loss of interest and motivation where a specific outcome is driven too hard by one or two key people. Again, there are no simple answers here! It is easy to say ‘take the middle ground’ but at times such a position may not be right either. You need to read the situation and play the game as you see it.

Tossing out ‘use by date’ knowledge

One of the greatest benefits of knowledge work and sharing wisdom is that you uncover what has reached its ‘use by date’. There are times when learnt wisdom may make a comeback, but a lot of times it will not.

Discarding non-critical knowledge assets is an important part of the improvement cycle, as it frees up a business for different thinking, savings and better resource management. For example, each year I take what many people would say is a radical step. I venture into my office with empty boxes throwing out 20 per cent of my books, probably 40 per cent of my accumulated paperwork and information from my computer databases. My books are donated to my local library and the paperwork is recycled. By doing this I have cleared my mind of clutter and created the opportunity for something new. Of course, vital pieces of knowledge are still safely kept or archived but, as a result of this tossing-out process, I feel infinitely better prepared for the next wave of change coming my way.

In a larger business tossing out ‘use by date’ knowledge is also very important. Tossing out assets may involve selling or licensing intellectual property, not renewing a patent, outsourcing a business function to another provider, terminating an old system or, even, changing staff. If the right decision is made, new relationships, better systems and a stronger competitive strategy will unfold. If you remove or outsource knowledge assets for the wrong reason your actions can come back to haunt you, so tread carefully at first. In this regard, avoid the slash and burn approach. The wrong cost-cutting exercise can quickly leave you with a vacuum of talent to run the business.

There are, of course, many thousands of businesses shedding knowledge assets each week. For example, Sara Lee discarded much of its sales force to concentrate more on marketing, sales and new product development by using B2C e-commerce. Ericsson outsourced its entire production of mobile phones and concentrated more of its efforts on quality assurance. As you would expect, these decisions are often very painful or difficult and often involve other competing considerations such as social responsibility or losing unprofitable customers and protecting the future of employees.

Finally, instead of jumping in straight away and buying new systems or acquiring new knowledge, you may wish to dip your toe in the water first and then explore possibilities without unnecessary risks. Three common strategies include:

pooling resources and doing study before committing to major change

forming a joint venture with a business partner where outlays and risk can be shared

conducting tests of a product or service in the marketplace before proceeding.

Summary

Riding the wave of change requires a diversity of leadership, technology and business skills. Business needs to help people stay afloat and gain control by providing practical support to build their capability and zeal for learning. New networks and knowledge-enhancing relationships need to be identified and built to grow competitive advantage. Individual and team creativity must be integrated and blended into the business brain by involving people in important decision-making and knowledge-sharing activities. Finally, important decisions are required to audit existing knowledge and to cast off assets which are no longer required.

Chapter 9: Sustaining and Keeping Talent

Overview

People do not leave bad companies, they leave bad bosses.

(Dr Beverly Kaye)

Sustaining and keeping talent requires:

going past money as the sole motivator

concentration on both individual and team retention

avoiding the stereotyping of people

discussing what personal success really means

being creative in how you say thank you.

Discovering passions and dreams

There is little point investing countless hours trying to win the knowledge game if you are unable to attract and keep the talent you need for your business. Somehow, each business needs to find the right formula to engage their people to be willing, skilled and motivated. People must feel that their work provides them a pathway to a better life and hope for the future. If you wish to inspire and keep talent you must assist people to extract meaning out of what they are doing so that they can progress, build confidence and grow. Most important of all, a business must foster a culture or attitude that rewards the flow of ideas so that a better future can be generated for everyone’s benefit.

To do this requires a unique chemistry, one that is fuelled by mutual respect and an emotional bond between its people. Only then will you have the capacity to drive the collaboration and know-how you need to achieve better results for your business and your customers. As a 2002 study by Hewitt Associates and the Australian Graduate School of Management found, the best employer excelled in four areas. These comprised, first, people leadership; second, accelerated learning and development; third, compelling employment offers which provided a higher purpose and a different work experience; and, finally, a business culture driven by performance, results, fun, celebration and recognition.

As one further explores the advice on keeping and inspiring talent it is very easy to be smothered by a multitude of possible options, programmes and strategies. Recent writing has been prolific and it is easy to be confused. However, some simple things can make a world of difference. People must feel that they can help to improve things and make a positive contribution. So, there must always be abundant opportunities for people to share and listen to each other’s passions, dreams and plans. When this occurs as the norm rather than the exception, a business can dramatically improve its chances of going beyond the attraction of money as the sole motivator and discover the real motivation of its people. Instead of using a salary increase as a solution, look for other factors. These could include building a friendlier workplace, regular meetings, good induction programmes, fairness and equal employment opportunities, shared spaces such as tearooms, organized social activities, working in teams, training courses, formal networking opportunities such as employee interest groups, sporting or other clubs and, finally, communities of practice.

A colleague of mine, Susie Linder-Pelz, said to me a decade ago that we should be less interested in absentee-ism and more interested in presentee-ism. In other words, looking at who turns up to work is only a small part of the equation; managers need to stimulate higher levels of contribution and enthusiasm from those who contribute everyday to the business. So be prepared to look at the root causes of poor performance and encourage people to get more meaning from what they do. Be prepared to listen to the whole message, however pleasant or unpleasant it might be. Each manager or team leader must see their responsibility as one that involves the capability to foster and nurture talent. If managers or team leaders do not have the skill or will to do this you will have a huge impasse in the system.

Research over the past decade by organizations such as the University of Michigan and web sites such as www.keepem.com has consistently shown that you can entice people with money and lures but you will not be able to keep them if they become unhappy, unmotivated or undervalued. This is particularly the case for more mobile, younger and

free-spirited individuals who know where their opportunities lie and where they can go.

Alternatively, a very low turnover of personnel may not always be wonderful news as a business may be full of people who just want to turn up to work even though they may feel deeply unhappy, alienated and powerless. All this means bad news for performance and innovation. Business needs to build high value and high loyalty in relationships where both the individual and the business benefit. We hardly want people just serving time. As John Herbert the former CEO of the Australian Institute of Management, Queensland Branch, says, people may say they have had ten years experience but in fact it is ten times one year’s experience.

The Saratoga Institute also says on the talent issue that between 50 per cent and 80 per cent of workers’ satisfaction is directly related to their relationship with their boss. If they have a healthy and open relationship they will most likely stay. In studies of over 70 000 exit interviews they found that the main reason a person voluntarily leaves is the behaviour of their supervisor. The secondary cause is perceived lack of growth opportunities. So, having a bad boss is not good news for keeping talent, or what some people call human capital. Wide-ranging and extended research also supports the view that meaningful and challenging work, a chance to learn and grow, fair compensation, a good work environment, recognition and respect are particularly important reasons to stay in a job.

A study of the Australian retail sector published by the Work and Family Unit in the Australian Department of Employment and Workplace Relations puts a different spin on the talent challenge. It discovered that retail employees seek much more control over working hours – not surprising given the length of trading hours in most retail outlets these days. It is also worth noting that higher pay and better career opportunities were also a point of contention for most retail employees. The Work and Family Unit also discovered that part-time employees are just as committed to business success as full-time workers. The study also found that many retail workers want a career and are becoming more and more careful about shopping around to find a good employer. As Dr Boxall from the Australian Retailers Association says, people want to work in organizations that value their contribution and assist them to achieve a work–home balance. Business needs are changing too, and there is opportunity here for win–win situations.

Alternatively, when it comes to the nursing profession there has been a host of recent studies that would indicate that the high turnover of nurses and failure to attract new people to the profession is largely driven by a lack of faith that they can change the health system. Concern over work–life balance and the limited time that they can spend with their patients is also rated highly. Such issues will need to be addressed if the current trend of severe shortages is going to be reversed.

So, to summarize, if you wish to sustain and keep talent you need outstanding people management. You need managers who demonstrate talent management as a core skill and motivation. You need people who are not caught up in their own self-importance but are more interested in building the capabilities of people around them. You also need to develop a business culture where people constantly ask courageous questions of each other. For example: ‘What would it take for you to stay?’ or ‘What might it take to lure you way?’ These questions not only help uncover possible concerns and motivations, but also show your genuine desire to help out and listen. This is vitally important if you wish to inspire greater contribution and reduce the likelihood of people jumping ship or setting off a revolving door of departures.

Seven sleeping giants of career management

To help you explore the changing face of talent management in modern business it is imperative that you tread carefully among the seven sleeping giants of career management. Each of these seven giants must be clearly understood and respected in order to prepare and respond in an intelligent and informed manner. These seven sleeping giants are discussed below.

1 The haunting cost of turnover

The first sleeping giant is the haunting cost of turnover. Beverley Kaye and Sharon Jordan-Evans in their book, Love ’Em or Lose ’Em , say that the cost of replacing people can vary between 70 and 200 per cent of a person’s annual salary. High-tech workers, professionals and managers cost twice as much as other employees to replace.

These estimates are not surprising, particularly when you begin to tally up some of the costs, including:

recruitment and advertising

travel and accommodation

downtime while people conduct interviews and make decisions

extra workload pressures on remaining staff

hiring temporary staff

downtime in productivity as the new person or team learns the ropes.

Then there is the loss of knowledge, connections and networks with the departure of vital people, not to mention the hidden intangible costs such as reduced reputation, loss of customers and brain drain. To make matters worse your ex-staff member can start producing wonderful results elsewhere, which can create all sorts of consequences in a competitive marketplace. To sum up, the reality of turnover is that all the intellectual property and know-how in the world will not make a scrap of difference if you do not have a sound talent retention strategy.

2 Chronic skill shortage

According to the US Census Bureau, sixty-one countries are unable to find the skilled people they need to perform the jobs they require. In recent years this has been very noticeable in professions like IT, management, teaching and, as previously mentioned, nursing.

Two main factors contribute to this shortfall. First, the rapid pace of change and, second, the low numbers of people in the twenty-five to forty-four age group. The implication is that finding and keeping talent is far more difficult than it was in the past.

Further evidence can be drawn from the following trends in developed economies:

A study by Accenture found that retaining the best talent was the biggest people management challenge, 57 per cent noting this as critical. Another study by McKinsey and Company found that in 75 per cent of organizations the senior managers did not believe they had the talent to perform their current responsibilities. This is backed up by a host of other studies with very similar conclusions.

In a similar vein, the American Society for Training and Development estimates that 74 per cent of the US workforce will need to be retrained by 2010. Likewise a study by TMP/Hudson Global Resources in Australia of 500 senior executives found that 76 per cent of their businesses require up-skilling to work effectively, while up to 66 per cent have limited understanding of or commitment to the values of the organization.

US managerial jobs will increase by 25 per cent in the next fifteen years but the availability of twenty-five to forty-four year olds is expected to decline by 15 per cent.

It is expected that in the next ten years, one-third of nurses in Australia will leave the workforce. This shortage is also being experienced in many other countries, for example in the USA and the UK. One major factor is the ageing workforce, with the average age of a nurse being forty-five years.

3 Higher career mobility

During the past decade there has been a noticeable change from full-time employment to part-time, contract or on-call workforces. We see this across all industries, including manufacture, retail and aviation. In the USA 26 per cent of the current workforce is temporary, part time or contingent, and this is expected to rise to 41 per cent by 2010, with even higher rates in countries such as Sweden and Norway.

This is indicative of individuals seeking greater freedom, balance and leverage of their time, resulting in them having a number of employers. At the same time employers are seeking to keep costs down by maintaining a smaller and leaner operation. As a result, a host of strategies are being employed to import know-how by other means, whether hiring more contract staff, employment of experts, acquiring consultants or changing work practices to be more flexible.

One of the consequences of mobility is the increasing difficulty in building and sustaining a unified business identity, particularly when a workforce is in constant transition. In some cases the people who worked in a business three years ago is only a small fraction of those who actually work there now. This is particularly the case in the more qualified or in-demand jobs. So, creative strategies need to be deployed to help the right talent to stay and contribute longer by giving greater opportunities to grow. For businesses such as management consulting firms, this may mean staff using an abundance of high-quality resources, tools and expert networks. In this case, employees are less interested in leaving because they are ‘handcuffed’ to the high quality of knowledge attached to the business.

Similarly special care must be taken to nurture and support staff who often take up new or extra responsibility when staffing levels are low. This is particularly the case in shift work or in high-pressure work. Left unattended, people can quickly experience a fear of responsibility or of becoming ineffective.

The consequence of higher career mobility means a business need to ensure people are

looked after and that the best are kept. To be successful, business leaders must increasingly see employment and hiring as a win– win partnership rather than a boss–subordinate relationship.

You can no longer see employees as people who come to work for you. It is better to reverse the mindset to ask how a business can inspire higher levels of contribution and commitment. Notable management guru Peter Drucker said, treat people as volunteers, not conscripts. As a result, businesses are increasingly exploring new and different incentive programmes such as paying for contribution rather than hours of attendance. Of course, you also need a sound approach to the protection of intellectual property, which will be discussed in Chapter 10.

4 Pied Piper effect

Job-hopping is now the nature of the beast in many industries. If you get someone to stay and contribute in a job for eighteen months you are doing well. Research by the Saratoga Institute indicates that after about two years of service you will normally experience some difficulties keeping people unless you have taken corrective action. An individual entering the workforce for the first time is now likely to have, on average, nine job changes by the time they reach thirty-two years of age. While a 2001 study of 1759 people on Monster.com.au discovered that 90 per cent of those surveyed expect to have a career change in the next five years.

As already indicated, loyalty is often at its highest at a team level and not at a business enterprise level. The consequence of this is that individuals will often stick together even at the expense of the organization.

For many businesses, getting too close to staff and building a shared commitment is just too hard. This is particularly the case where the management are too preoccupied on matters other than people development and, as a result, see their staff and know-how as dispensable resources that can be hired and fired at a moment’s notice.

An interesting side product of team loyalty is that turnover is not just an individual issue, it has become a team or tribal issue. As in the famous children’s story of the Pied Piper of Hamelin, whole teams can often get up and leave or are headhunted en masse to move to another business in what is affectingly called the Pied Piper effect. The result of such a loss of team talent can be catastrophic. Businesses are responding to the Pied Piper effect with a long list of strategies from sophisticated retention programmes to simple ideas such as in Silicon Valley where past employers are sending past employees postcards with the theme ‘Is the grass greener?’ to try and entice them back. In some cases people discover that the image given in recruitment by a new employer is not matched by reality, and they return in either a full-time, part-time or subcontractor capacity.

5 Working poor

One of the more disturbing trends of modern workplaces is the increased incidence of the working poor. Working poor can be defined as those people who, even after working, are unable to stay above or who remain very close to, the poverty line. This is systematic of all types of employment normally attributable to people in lower paid jobs.

Not surprising, many people in low-wage jobs do not have the education level or

accreditation to get better-paid jobs. The National Coalition against Poverty in Australia and global organizations such as the International Labour Organization and the United Nations Children’s Fund (UNICEF) have been drawing attention to the issues of the working poor as well as child labour, educational opportunities, Internet access and unethical business practices in an attempt to improve the situation.

There is a host of statistics and stories to support the conclusion of a widening gap between the haves and the have-nots. Suffice to say, businesses need to be sensitive to this problem. Just because someone is employed does not necessarily mean that they are able to sustain the quality of life they need for themselves and their family. For example, Japan has a relatively low unemployment rate compared with Spain, but both countries have child poverty rates of 12 per cent.

6 A craving for balance

Many people are currently reviewing their lives and searching for new ways to find greater balance and to do what they love. We see this increasingly where people are choosing different lifestyles or employment options. This trend is set to continue, particularly as access to cyberspace becomes more mobile.

A study commissioned by the Australian Council of Trade Unions provides extra evidence of a world trend that people are craving for balance. It found that one in five Australian workers now works more than fifty hours per week. The study found that long and unreasonable working hours were damaging families, friendships and community life. It is common for some people to go days without seeing their children and partners and, as a result, are missing out on key milestones in their lives such as birthdays and anniversaries. Understaffing and/or talent shortages have meant countless e-mails and mobile phone messages massively invading people’s private time. Workers who elect to spend more time with their families are viewed with suspicion.

Younger people are also highly susceptible to hitting the wall of burnout at an earlier age if not well looked after. A 2001 study by health monitoring group Tanita Corporation found that 70 per cent of twenty to thirty-five year olds surveyed said their workloads have increased in the past two years. From personal observation I am increasingly seeing twenty-five year olds ‘washed up’ and opting to escape from work to recharge or start a new lifestyle. This is not surprising given the ever-increasing pressure of people to do more with less, resulting in a waning of people’s health and a lack of work–life balance.

7 A boom of depression

Studies by such organizations as the Australian Medical Association and the St Vincent de Paul Society provide solid evidence that human depression is fast becoming one of the biggest health issues facing developed economies. As an example, it is predicted that in Australia depression will be the second biggest health concern by 2020. It is estimated that of the 90 per cent of people who see a general practitioner once a year, 49 per cent when surveyed showed evidence of common mental disorders. These observations are supported by similar studies by the World Bank and World Health Organization. They report that mental illness now constitutes one of the largest causes of disability for Western communities.

The implications of this last sleeping giant are profound. It translates into a vivid realization

that managing stress and associated depression is now a major priority in sustaining and keeping talent. Concentrating solely on ideas and innovation is not enough. We must focus on people’s mental health, well-being and relationships to ensure depression and anxiety are not left unchecked. Business leaders must foster a culture that helps people to cope and self-manage without unnecessary levels of stress and depression. Studies across the world have consistently shown a very strong correlation between stress, lost productivity and excessive working hours.

As Professor Robert Lane from Yale University says, ‘The most powerful cause of depression is not brain derailment but disruption of family and friendly relations. Friendship (the main contributor to happiness) is not a market commodity’. So if you wish to help reduce depression and improve talent levels, take an interest in people, make them feel special, valued and part of a team.

Other findings on emotional health include:

British Academic, Bill Lucas says that the brain’s efficiency can be reduced by up to 90 per cent while working under pressure. Emotions and our ability to cope with pressure, have a massive impact on our ability to think, solve problems and communicate, whether we are conscious of it or not.

People who are unable to effectively manage their stress had a 40 per cent higher death rate than more emotionally managed individuals (Eysenck).

Bryan Stock, an authority on emotional intelligence, says that one emotion can lead to 1300 chemical reactions in the body.

The HeartMath Research Center at www.heartmath.com has shown that spending just five minutes genuinely feeling appreciation for things in your life that you value, can boost your immune system for up to six hours.

Building capability

It is obvious that sustaining and keeping talent needs a plan of action as one responds in a confident way to any of the seven sleeping giants that your business might be facing.

If key people leave unannounced, taking with them years of know-how and expertise, we have a problem and it must be fixed. Thinking, after they have left, how you could have better managed a person is far too late. We must inspire and motivate people while we are with them. Our leadership and management are again vitally important!

Of course, wasted talent is not just about unplanned departures, it also involves a careful strategy of downsizing and retrenchment. With a little more planning we can save significant embarrassment. Workplaces are full of people who have been hired back at far more expensive rates to solve issues, which they could still be doing as existing employees.

What can one do to build the capability to keep and sustain talent? Of course, simple respect and better people management is a great start. Four principles are central to this cause:

The business needs to inspire vision and a compelling case for people to stay.

You need to help people gain a greater sense of control and choice in what they are doing.

Good people need special care; just because they are performing well does not mean everything is satisfactory.

An effort needs to be made to identify career goals that stimulate motivation and learning.

When the above start to occur, the chances of sustaining and keeping people will be so much higher.

However, we cannot assume that managers and team leaders have these skills. From experience, in many businesses such basic people management skills are rare. You will find people need reminders and training to help fill this gap. The business should clearly explain the importance and consequence of better talent management. For example, most people would agree that growing competitive advantage is impossible if you have extraordinarily high turnover, or people hate working with you. It is particularly important that you honestly review people’s performance. Steering clear of stereotyping based on age, gender, race, disability and educational background is a great start. For example, common assumptions need to be questioned. Do all young males really have potential? Does a young female really need time to grow? Tread very carefully.

To help apply this massive field of sustaining and keeping talent to your business, Table9.1 lists fifty talent-building ideas.

Table 9.1 : Fifty talent-building ideas

Sharpening your public image

1 Before looking for new talent, make sure you know what skills and capabilities you

are seeking.

2 Share stories of your successes and how you treat your staff. Testimonials and case studies are very useful in the marketplace. If you have won awards, or you are seen as applying best practice, let people know.

3 Make sure your public documentation is available via the World Wide Web or in paper form and that it looks professional.

4 Attend trade shows and share your story. Do public presentations and issue press releases about what you do. Again a little self-promotion can work wonders.

5 Join industry networks, professional associations and voluntary organizations, and be a good corporate citizen. Learn who are best at sustaining and keeping talent and discover their lessons.

6 Form close relationships with universities, schools and trade colleges. Earn a good name with potential hirers. Being a good corporate citizen also works wonders.

Recruitment

7 Seriously consider recruitment training. Discover how biases, unfairness, discrimination and poor interviewing and screening can hurt you.

8 Advertise vacancies in multiple sites and locations. Make sure you are not neglecting your own staff before looking elsewhere. Set up a job posting for internal job application processing.

9 Join forces with other businesses to form an industry response to the shortage of talent, detailing career opportunities and training opportunities available.

10 Consider the advantages and disadvantages of securing the services of a recruitment firm or employment agency. Agree on a monitoring and review process.

11 If it is appropriate, explore talent from overseas or another geographic region or industry. Engage services with professionals who work from remote locations and consider using technology such as file sharing, e-mail and threaded discussion groups.

12 Make sure you honestly communicate career paths and opportunities. Do not oversell the job and be candid and realistic and honest.

13 When people join you, welcome them as full members of the team, in whatever capacity they fill. It does not matter if they are temps, full time, part time or contract workers, they must be valued and recognized.

14 Make sure agreed employment contracts and confidentiality agreements are fair and reasonable, and that both parties agree to them.

15 After hiring is complete, conduct post-interview discussions with both successful and unsuccessful applicants.

Day-to-day support

16 Make sure people have the right tools, contacts and information to do their job.

An induction package is a smart idea.

17 Make sure you discuss planned business changes. Frequently ask people for their ideas and how they believe they can contribute better.

18 Inspire loyalty and provide constant feedback with both integrity and honesty.

19 Provide regular career coaching and planning advice. In some cases, consider probation or job trials to see how people fit into different roles.

20 Create meaningful ways to celebrate successes and recognize contribution. Build a sense of community, team spirit and belonging.

21 Ensure good professional health and professional emotional support is available.

22 Hold performance discussions to ensure adequate and relevant feedback. Again training and user-friendly assistance is vital.

23 Make sure you are looking after the people who are staying.

24 Deploy creative ways to say thank you and have fun.

Learning and development

25 Use training, mentors and coaches to develop potential.

26 Make sure the job is seen as the real classroom. Undertake knowledge sharing to the maximum effect.

27 Invest in in-house training, consider both face-to-face learning and e-learning.

28 Use public courses and hire expert educators and consultants if you need to train a team.

29 Reward learning and provide incentives for people to share their wisdom.

30 Make sure you capture vital knowledge. Place critical knowledge on business archives and help desks.

31 Make sure people receive feedback on their leadership. Consider a range of self-help tools for ongoing development in how they sustain and keep talent. Work smarter tools such as business planning, time management and people management are normally a great start.

32 Sponsor and encourage external study.

33 Encourage the establishment of informal learning, through networks and community practice.

34 Ensure you have a succession plan. Consider future business strategies and your current talent. Chart the way forward, together.

35 Make sure performance goals are clear and understood. Discuss how work can be changed to provide greater stimulation and variety. Ask them what would keep them in your team or what would encourage them to leave?

36 Hold managers and team leaders responsible for deploying sound retention and talent-nurturing practices. Move managers or team leaders who are causing damage.

37 Use temporary projects and special assignments to build skills.

38 Reward coaches and knowledge sharers.

39 Use job rotation to transfer people around the business, to spread and develop their capabilities and know-how.

40 Use your mentors, coaches and subject-matter experts as facilitators to help address chronic gaps in know-how in the business. Help people to position their

knowledge for the future.

41 Use joint ventures with other organizations to build expertise and know-how.

Flexible work practices

42 Address work and family issues up front, giving them chances to discuss rosters, schedules, start and finish times, and holiday leave.

43 Deploy flexible work practices such as part-time work, working from home, job sharing and reasonable working hours.

44 Use older workers and early retirees in a part-time or full-time capacity.

Supplement them with a good mix of salary and options such as flexible hours to suit their lifestyle.

45 Creatively use digital technology to engage talent, for example, telecommuting and virtual teams.

Borrowing

46 When you hire special help, make sure some of their capabilities and know-how is captured and stays in the business.

47 Make sure you have agreed standards for protecting intellectual property.

48 When people leave make sure you hold exit interviews. Explore their reasons for departure and extract ideas on making the business a better place in which to work.

49 If they leave, keep the relationship going and be a good citizen. Be gracious and noble because one day they may want to return or put in a good word for you. Allow them to retreat with dignity and grace.

50 Get an independent assessment of how your business performs in the area of sustaining and keeping talent.

Being a great employer

As one explores the terrain of talent management it is obvious that people management is a major influencing factor and in most cases is firmly in your control. Whatever the economic situation or business climate, efforts should be taken to keep a close eye on how people are feeling and performing. People need to know that they are empowered with the authority to do their job, while also recognizing that what they are doing is adding something of value to society rather than just creating wealth or saving costs.

Better employers also take an active role in career planning. This often means jointly discussing what success means. Does someone really want promotion, or is he or she interested in other options like, job stimulation, greater balance or different levels of responsibility? Helping someone to discover new career options can often open up whole new avenues for adding value and learning more.

Let us say a person wants to be a journalist and their current job does not call on that skill. However, with a little creativity and task swapping this person could soon be performing more writing in the job, which could make a world of difference to his or her motivation and contribution to the business. In addition, using the same example, taking the writing responsibilities away from someone else often may free them up to do something which they would prefer to be doing. In most cases people love you for being a little more receptive and flexible in how jobs and work are organized.

Good employers also see diversity as a plus. They engage talent by mixing and blending people from different backgrounds, whether of different ages, expertise or cultures. This provides the creative tension they need to win the knowledge game. For example, a young workforce may benefit from having older workers in the team, particularly if the benefit of having a greater pool of expertise is understood.

Finally, you may find it useful to do some reading on the specific needs of different age groups, that is, Baby Boomers, Generation X and Generation Y. People born in the 1960s to the mid-1970s (that is, Generation X) are perceived to have quite different work expectations to Baby Boomers. However, we need to be careful in making massive generalizations. Although the reading could lead to a host of new ideas, be prepared to sit down and discuss unique needs face to face with the person concerned. So, do not run off and buy a box of baseball caps, order pizza or let people bring their pet to work if he or she thinks the idea is silly or just window dressing.

Again, business cannot guess and make assumptions about people’s needs. Listen to them and, if appropriate, conduct an independent survey to get a more accurate view of the talent picture and story.

Creating fun and rewards

What can easily be lost is that work can and should be fun. Enjoyable places of work can be entertaining and can give great comical relief as well as achieving visible results and outcomes. Work can supply a real sense of friendship, family and community, if we get the dynamics right. From experience, the teams that show greater creativity in how they say thank you generate higher levels of commitment. So say yes to fun and rewards and help foster motivation, desire and contribution.

Fedex for example, name their aeroplanes after the names of employee’s children. Each time they buy a new plane, employees are invited to submit their children’s names and one is randomly picked. Not a terribly expensive exercise but it means so much to its workers. Such novelty is essential as it helps to create a new and curious environment for learning.

Most important of all, business needs to loosen up, be less serious and grab every opportunity to build a positive attitude while doing a professional job. In saying this, you do not have to be a comedian and tell jokes every day, but it does help if you can find something to smile at on a regular basis. So whether it is having birthday cakes, bringing in baby photos or having a game of football, look for some fun for yourself and your business.

These ideas have a non-monetary reward attached to them. They make people feel included, valued and important. Even a creative idea can become boring if it is overused. For example, some people are hooked on after work drinks. These social functions can be a lot of fun but they can also be boring if they are poorly organized or overused. So spark your imagination and come up with some new ideas.

Here are some ideas I have observed in recent times to help spark incentive:

Give people a choice of changing their working hours or duties.

Purchase a theatre ticket or send a personal thank you card.

Acquire an award trophy or mention people’s work in a report or newsletter.

Invite someone to an important meeting.

Pay for them to attend a special conference or training course.

Let them have a car parking place for a month.

Give a small on the spot cash reward.

Summary

Sustaining and keeping talent is one of the biggest challenges in business. The solutions lie in a variety of actions. First, we need outstanding and effective leadership. Second, we need to discuss what people’s dreams and passions are and then help them to map out a career plan. Third, business must adapt and work with the challenges of chronic skill shortages and the lack of balance in people’s lives to give them the best chance to perform in a lasting way. The best employers move beyond just running their business, they involve others both emotionally and intellectually in how they are rewarded, valued and involved. Most of all, they make work a fun place by building community, teamwork and incentive. That way they dramatically increase the chances of knowledge and innovation being seen as fun and stimulating experiences while not jeopardizing life outside work.

Chapter 10: Protecting Intellectual Property

Overview

We are moving into an economy where the greatest value is in recipes, rather than the cakes.

(Charles Leadbeater)

Protecting intellectual property requires:

safeguarding your intellectual rights

a comprehensive trademark, patent and copyright strategy

agreements on what can and cannot be shared

recognizing the legal rights of copyright owners

closely vetting innovation development firms.

Profiting from your genius

In the world of business there are many people who are ruthlessly searching for a leading edge that will help them profit at your expense. Stealing ideas and diminishing reputations both within and outside the law has become a fact of life in the knowledge economy.

In this knowledge economy the industries which are creating in-demand assets such as licensing fees, branding and royalties have become the ‘movers and shakers’ of twenty-first century business. For example, it is estimated that by 2006 half US work placements will be employed in knowledge-generating industries for their primary sources of wealth. Here competitive advantage depends on the ability to stimulate and capture knowledge, and reduce the risk of losing intellectual assets, talent and know-how elsewhere. So it is not surprising that intellectual property protection is now a major concern of thousands of businesses worldwide, particularly given how easy it is now to publish and send vital secrets to a cast of millions by cyberspace or the mass media in a fraction of a second.

To highlight why the protection of intellectual property (IP) is so important let us take the story of retired managing director, Frank Bannigan, who in 1972 developed the Kambrook electrical power-board which is now commonplace in most homes. As the IP Australia tells on their web site at www.ipaustralia.gov.au, it was not patented and when it hit the marketplace Kambrook ended up sharing many dollars with a host of other manufacturers. According to Mr Bannigan, ‘I’ve probably lost millions of dollars in royalties alone. When I go into a department store and see the wide range of power-boards on offer, it always comes back to haunt me.’

The lesson of Kambrook is not unique. It is repeated many times a year in most countries throughout the world. Probably the most famous case was the Wright Brothers. Popular history tells the tale of how the Wright brothers on 17 December 1903 were the first to complete the first powered flight. This is not true. It was a little known New Zealander, Richard Pearse, who completed the first flight some eighteen months earlier on 31 March 1902 in New Zealand at Waitohi. In fact, Pearse completed at least half a dozen recorded flights before the Wright brothers were ever successful. Sadly for Pearse, it was 1909 before any newspaper covered the story of his amazing success. By then it was far too late, the Wright brothers had already gained massive international exposure and recognition. Even now, some 100 years later, most people have never heard of Richard Pearse. This story is another example of why it is so important to protect, manage and market your IP and market your success.

Let us begin with sound grounding principles of IP. To win the knowledge game it is imperative that your business takes a series of legal and business steps to protect your genius, whether it is an invention, a trade secret, a brand or a piece of creative work. In saying this, a business should never lose sight of three fundamentals. First, just because you have a registered trademark, patent and copyright does not guarantee you business success. These need to be backed up with a comprehensive marketing and business strategy. Second, good IP is only a small part of what you need; you must stimulate and grow a workplace environment that celebrates ingenuity and enterprise as a natural part of the business psyche. The fact that you have a patent listed on your company accounts may look good, but unless you back it up with hard work your efforts will be wasted. Finally, be prepared to think well outside your own country to safeguard your interests and be prepared to register your IP rights in overseas markets as well.

In this regard you have to think deeply about your product, business and market. For example, a senior scientist in a biotechnology business, Gradipore, estimates that on average it costs them between US$30 000 and US$50 000 to take a patent application to the right national and international coverage. This cost does not include the cost of redesign and testing of the patent. While in a recent case where a legal judgement was required, it cost around US$50 000 for an opinion.

So, as you can sense, the protection of your IP needs to be done in the right way. It is not something you can normally handle on your own. You will need assistance from a host of people, including government agencies who supervise the registering of trademarks, patents and copyrights, IP attorneys and a host of other professionals who can give advice on funding, marketing, manufacture and distribution. However, when approaching these people be careful to keep your cards close to your chest and develop relationships based on a need-to-know basis with clearly understood and articulated confidentiality agreements.

When protecting IP you also need to be prepared for some legal ambiguity, particularly when it comes to stopping people from sharing their knowledge. For example, Jac Fitz-enz in his book, The ROI of Human Capital, says, ‘it is relatively easy to slap a brand, trademark, copyright or patent number on a piece of intellectual property. It is a bit more bewildering to find a method for putting one’s brand on the human brain’. A judicial battleground has now formed, with lawsuits flying in all directions trying to establish a body of legal precedents for intellectual assets. For example, Apple spent millions and nearly became insolvent trying to protect its PC windows concept against Microsoft. Sun Microsystems was able to win its case on the propriety nature of Java (a browser software) against Microsoft but it took many years. It is a very tough field, but if you do the basics right you will be on much stronger ground.

Consider the common dilemma of a family friend whom I will call George. George is a stockbroker in a medium-sized firm in Sydney. At a Christmas cocktail party I raised the idea of sharing knowledge. His response greatly interested me. He said that sharing your knowledge may be a very noble idea but it could mean contemplating professional suicide. If you share more than you have to, people will know everything that you know and your security is threatened. Once your knowledge is visible the organization can protect it and restrict you using it as they see fit. The result being an impasse, where George shares enough to get the job done but probably nothing more. Quite simply, his company is not reaping the full potential of George and his know-how.

If only George could be encouraged to be a little more open, his capability could grow as he begins to review and question his assumptions, relationships and frameworks. No doubt, under the current stalemate both parties are losing. Of course, this situation will worsen further if George actually does leave and his knowledge has not been captured. This may result in a serious loss of competitive advantage if vital IP and business relationships have not been protected. I am not assuming, of course, that George would act unethically or break the law. So it is imperative that business has the counterintelligence measures to ensure that vital knowledge is protected.

One way to do this to ensure IP is protected with excellent confidentiality agreements for all forms of employment, whether for one-off contractor relationships, full-time employment contracts or when termination occurs. It is imperative that people know that they can be employed and leave on good terms, and obligations and rights of inventors are safeguarded.

Effective processes must be used to reduce risk. For example, people often have access to important databases and, as a result, have the opportunity to download or copy vital knowledge as well as causing possible disruption to services. So, you will need to supplement IP strategies with adequate security such as changing passwords and restricting access. This is particularly important in high staff turnover areas.

At the time of departure various risk management conversations may need to be carried out to explore the potential for brain drain or loss of know-how. Examples of questions could include:

What proprietary knowledge did the employee compile and where is it stored?

Who are the employee’s key customer contacts and business relationships?

What important knowledge did the person hold and will its loss hurt the business?

In addition, you may grab the opportunity to quiz the departing individual on what could be done to improve how the business could better stimulate, share and act on their know-how. Of course, in most situations this is far too late, as was discussed in the previouschapter on sustaining and keeping talent, it would be much better to explore such topics and his or her motivation well before the moment of termination or departure actually occurs.

To sum up, every business will need a combination of different approaches to profit and benefit from your genius. You might start by deploying a stick approach where an employment contract would spell out penalties for taking expertise, clients and contacts in the marketplace elsewhere. Alternatively, you might deploy a carrot approach whereby you organize a targeted accelerated development programme for key people who have vital skills, knowledge and capabilities, thereby building a business relationship which recognizes talent and encourages them to share more by investing a greater amount in people ’s development. That way you may just increase the chance that everyone wins for longer period.

Given the complexity and legality of this field here are a number of definitions in Table10.1 to help start you off. I strongly recommend you visit the following web sites for deeper and more up-to-date commentary:

Table 10.1: Intellectual property--help desk

The listing in this help desk draws on a host of resources across the globe. It is important to double-check the accuracy and context of these in your region and country. You will also need to note that different common law and statute provisions will apply.

Assignment is when a patent, design, trademark, copyright or trade secret is sold and/ or transferred to another party. An assignment must be in writing and signed by or on behalf of the owner for it to be legally effective.

Confidentiality agreements are legal documents that aim to protect matters of agreed importance from causing damage, harm, or becoming public.

Copyright protects the rights of the original creator or the innovator of creative work. These include tangible mediums of expression, such as a book, screenplay, training module, drawing, recording and broadcasting. This is a rapidly changing field and many countries have amended their legislation to have a more realistic coverage

within the context of the digital age. As a rule of thumb, copyright does not protect ideas, but rather the way that ideas are expressed. Copyright is designed to protect you economically (that is, your economic right) and your reputation (that is, your moral right). In this regard the moral right is much harder to transfer.

Cybersquatting describes the practice of deliberately registering domain names which are the same as, and/or similar to, famous organizations, brands or people.

Design is a feature of shape, configuration, pattern or ornamentation, which is applied to a product. In design the emphasis is typically on the visual appearance, for example a fabric design or the shape of a bar stool, rather than how it works.

E-law is an emerging body of law relating to the Internet and electronic commerce. In some cases existing defamation law can be applied to digital communication but there are emerging fields such as domain name protection (cybersquatting).

Intellectual Property, sometimes called propriety knowledge, refers to property of your mind or intellect. In law it gives the right to use and commercialize, to prevent others from using and marketing, and as a lever for negotiation.

Legal protection occurs under a range of sources including common law, infringements of trade secrets, passing off of trademarks and breach of confidentiality agreements. A range of consumer protection and fair trading legislation normally backs up your legal rights. For a trade secret, the owner must demonstrate that measures were taken to protect it, such as limiting distribution, securing it and appropriately classifying its documentation. As a general rule this will cover a bundle of IP, including a large array of possibilities such as patents, copyright, trademarks, registered designs, confidential information, domain and business names, plant breed and circuit layouts.

Licence gives to another party the right to use but not own the copyright, patent, trademark or design. The owner normally receives payments or royalties for use based on a commercial agreement. Licences can also be exclusive or non-exclusive in nature.

Passing off is where a person or company is deliberately trying to injure the business, or goodwill of the legitimate organization.

Patents are a monopoly granted to inventors who have created something innovative. In return for a patent, the inventor has to reveal how this invention works. The normal length of a patent is twenty years for a substantial difference in an invention and eight years for a non-obvious innovation of existing technology. The criteria for granting a patent are that it must be able to be manufactured, be new, involve an innovative step and be useful, such as protection of new plant varieties. What can be patented varies from country to country. For example, software and algorithms are accepted in Singapore and the USA but some other countries do not include these options. In Australia artistic creations, mathematical models, plans or a purely mental process currently cannot be registered. So, again, check with your local authority for correct definition.

Registered rights are where you register patents, trademarks, designs or plant breeders rights (for new plant varieties) with a local country authority.

Trademarks are protection given to names, letters, words, symbols, pictures, sounds or smells, or combinations of these. They are used to distinguish goods or services from other providers. Examples could be a word like Xenical which is a distinguishing

Australian Copyright Council – www.copyright.org.au

Centre for Law in the Digital Economy (CLIDE) – www.law.monash.edu.au/clide

Copyright and Intellectual Property – www.disastercenter.com/copyrite.htm

General Law Resources – www.megalaw.com

Intellectual Property Australia – www.ipaustralia.gov.au

Ministry of Law – www.minlaw.gov.sg

Oz Net Law – www.oznetlaw.net

World Intellectual Property Organization (WIPO) – www.wipo.org

name for a drug owned by F. Hoffmann-La Roche AG in Switzerland. Slogans like ‘Oh what a feeling!’ used by a car manufacturer Toyota in past advertising is also a registered trademark.

Unregistered rights are those common law protections such as copyright and circuit layout rights, which you are not required to register.

Doing the basics right

As you would expect, this field of law and business commerce is not short on advice. A lot of it is free, while much is on a fee-for-service basis. It is essential that you tap into this help and go about the process in the right way.

Of course, reaping the benefits of your IP protection requires careful thinking, the right level of secrecy and applying many of the skills we have already discussed. So what are the basics you need to consider? Using the abundant resources of organizations throughout the world, I have drafted eleven principles which will help you protect your IP:

1. Start by beginning a detailed audit and recording of the intellectual property you own and its value. You may need external help to do this properly. It some businesses this may be part of the annual planning cycle. Then, before starting any new registration of IP, first consider the relevance of the know-how to your business. Any idea for the protection of IP needs to be of business value otherwise it will not attract the investment and backing you will need. Will the intellectual property steer you in the business direction you desire? Other questions could include: does the propriety knowledge fit the core technology, know-how or capability of the business? What type of professional, logistical and financial support will you need to make it work? Will you be able to support it with the required time and effort?

2. Creating IP does not mean you will automatically own the rights to it! You must take up formal registration if you want the legal rights and benefits of being an owner. In the case of copyright and circuit layout rights, your rights are automatic if you are the author or creator. You must apply individually to each country of interest; you cannot get blanket worldwide coverage. Be very clear about your intentions and business plan as you do not want to fall into the trap of unnecessarily running up a huge bill and becoming involved in an administrative nightmare. In most countries you can now get a provisional patent for twelve months for a nominal fee that gives you the breathing space to do some of the homework before the formal patent application process begins. This will allow you the chance to explore the right portfolio of protection. In the case of formal lodgement process it normally takes two to three years if everything goes smoothly but much longer if the application needs clarification or proving.

3. Where possible, avoid talking about your IP until it is registered. Timing is everything. Make sure that your marketing and business dealings do not allow your idea to be stolen and registered in another country before you have had the first chance to use it. Careful planning and smart publicity is vitally important. Most important of all, think big before you go public. You also need to have the right level of security on such services as web sites to reduce the likelihood of vital knowledge getting into the wrong hands. If you are not taking protection seriously you may diminish your legal rights at a later time. You will need to be clear of what you can share and what you should own. Remember that being first to the market is only an initial advantage. If you register the right trademark and design in the right way with the right authority, you have the capacity to reap higher rewards. It also helps if you keep a step-by-step witnessed record from the birth of the idea until the time the idea receives formal registration. A useful tip when you come up with an idea is to mail it to yourself or record it in a self-addressed envelope and do not open it when you receive it. This then becomes proof of when you came up with the idea.

4. Where you need to use business relationships or a joint venture to manage the IP process it must be based on honesty and transparency. Look beyond just the legality of the arrangement to whether you will be able to work together in business. Be upfront with your joint venture partners, fellow inventors and employees. That way you are better able to determine whether there is a good fit to the cycle of innovation. Establish clear guidelines on how the relationship will be managed and audited. Secure commitment with non-disclosure agreements.

5. Unlike tangible assets such as plant and equipment, IP can increase in value. Look at your financial reporting and list your registered rights, trade secrets and branding, and place a monetary value on them. Make sure your staff and business partners understand the reason why the IP strategy is important and why such knowledge is worth protecting. Conversely be prepared to toss out IP which is no longer serving any purpose. Develop an infringement policy if parties break confidentiality or they infringe your legal rights. Again seek the advice of an IP expert if you are in any doubt.

6. Be clear about whether your idea meets the criteria of being a trademark, a patent or a design. Make sure you use the on-line search facilities that exist in most Intellectual Property Registration Offices. Some skilled inventors prepare their own applications, but employing the services of a registered attorney or IP expert can develop a stronger proposal. Make sure your formal document process ensures that all the correct information is collected and secured. Needless to say, shredding or erasing damming and/or vital evidence is a big mistake and could hurt your legal status at a later date.

7. Carry out an advanced and detailed search of existing IP. You have to be careful you are not infringing the legal rights of others. To do this you may need to hire a legal practitioner or a search firm to undertake the in-depth analysis and preparation required. An interesting fact is that you can now access a worldwide database of over 30 million patent documents. This is a powerful source for studying technical trends and competitive intelligence. If you deem it necessary, you can choose to challenge the upcoming grant of IP rights to another party if you believe it is unlawful. If a patent is challenged, the patent is normally presumed to be valid and the burden of proof is on the challenger. In addition, you might wish to explore a host of private providers that help business keep a track of IP approvals and industry-specific research. Two examples of web sites that offer services in this area are www.delphion.com and www.nerac.com.

8. Having done all the hard work and registered your IP you then need to take every chance to market your know-how. The more you promote and market, the more the benefits will blossom, particularly if your customers, suppliers and manufacturers see it as of high value. Even the best ideas can be overtaken if you do not have well-organized marketing and innovation campaigns.

9. Use your rights smartly. You can choose to assign or license your IP to another party. This would normally be done if you do not have the time, funding or desire to develop and market the idea. There are a host of providers who could assist you to find a good deal. As in any industry, there are sharks in the marketplace who are very keen to take your money. So be very careful! Make sure you undertake reference checks before you proceed into any formal agreements. This will be discussed further in the last section of this chapter.

10. It is very easy to become paralysed by the excitement of your idea. I know this as an author. You need to keep your feet firmly on the ground, be a little detached and ask who is going to get the business benefit of this idea. Some ideas may sound good in theory but may not work in practice. So, be courageous and mature enough to do an independent market assessment.

11. Finally, a business needs to accept that even the best idea will be superseded. What was a great idea three months ago may not be so now. You must be studious about protecting your IP but not become subsumed by it. What is more important is that you have a healthy capacity to review your IP. Making sure you are getting the credit you deserve, anticipate and manage the risk and maintain the right flow of knowledge to ensure you grow your competitive advantage.

Drafting confidentiality agreements

A rapidly growing area of practice in IP law is writing confidentiality agreements or what are sometimes called non-disclosure agreements. These could be used in a variety of scenarios, including arrangements involving employees, subcontractors, consultants or joint venture arrangements. Such legal practices are normally supported by a range of common law rights such as ‘breach of confidence’, as well as legislation like trade practices and fair trading. For example, in the USA they have enacted legislation to protect trade secrets.

Let us explore the implications of common law to increase your chances of drafting a workable and enforceable confidentiality agreement. First, there must be a clear declaration of which specific information is deemed confidential. This is assisted by a written agreement but it does override the common law doctrine of ‘breach of confidence’ between the employer and individual. Second, with regard to employees, there is a strong common law principle of displaying a ‘duty of good faith’, which prevents an employee using any relevant information to damage the employer’s interests. The ‘duty of good faith’ is normally covered in the employment contract. Third, the rights of the employer must be balanced against the rights of the employee. An employee must be able to earn a living, using his or her knowledge and skills that they developed during their employment. Finally, a former employee may freely work for a competitor and engage in any activity which directly competes with a past employer as long as he or she does not use the former employer’s confidential information, for example chemical formulae or secret manufacturing processes. A famous case of this type was that of Jose Lopez De Arriortua and three of his former colleagues who absconded with proprietary documents when they moved from General Motors (GM) to Volkswagen (VW) in 1993. It was settled out of court for a cost of US$100 million. However, for the record, an employee is not prevented from using his or her recollection of commercial information that has not been kept secret, such as names of customers, to compete with his or her original employer.

Specific clauses to include

So what does one include in a confidentiality agreement? To start with, this heavily depends on the context and specifics of the situation, so again it is important that you consult a legal professional when considering such an initiative.

It is worth noting that a confidentiality agreement can help to open up conversation rather than close it down. For example, when consulting I often come across team conversations where they are not willing to discuss a business matter in front of me, as I am an outsider. If, however, it was decided that I needed to be part of a conversation that is commercial in confidence I may need to sign a confidentiality contract. That way we can continue in a more open and helpful environment. So, a good confidentiality agreement may not only safeguard your business but it can open up the arena of discussion.

To assist you draft a confidentiality agreement, these are some of the elements you could expect to see:

Definition of confidential information outlines the scope, ownership and binding nature of the coverage. This would normally include trade secrets such as a manufacturing process, recipes, engineering and technical designs and drawings,

product specifications, customer lists, business strategies, and sales and product information.

Understanding the practicalities details in what capacity the information is not to be disclosed and to whom. These obligations may also spell out matters such as setting up a competing business in the marketplace or using confidential or trade secrets.

Limits on non-disclosure spells out the limits on what is deemed confidential. There must come a point where information is in the public domain or is common knowledge. These boundaries must be detailed.

Length of term the length of the agreement must be long enough to protect the interests of the parties while also not unduly burdening people’s rights.

Other possible clauses – there are a host of other considerations which may need inclusion:

rights to amend or even end the contract if both parties agree

return of confidential material

options of mediation or arbitration

specific reference to a relevant law or legislation

rights of injunction, damages or redress if the agreement is breached – area of coverage, for example specific market tool or scientific invention.

Copyright in the digital age

One of the most rapidly changing areas of IP is the law of copyright. A major driver is the Internet and this has required most countries to go back and rethink their approach and coverage.

For example, copyright legislation in many countries has recently been amended better to reflect trends in on-line transfer of media, entertainment and communication material, providing better coverage on the exclusive rights and penalties. This was seen when Napster was forced to restrict access to copyright material via their web site. As a guiding principle, once original work is created it is copyrighted and as a result is protected from copying or plagiarism. This work typically includes written material, artistic works, musical works, dramatic works, computer programs and compilations.

In recent years there has been significant co-operation and cross-fertilization between countries to provide greater consistency across the globe. For example, the International Treaty for the Protection of Literacy and Artistic Works (the Berne Convention) was established to require nations to recognize the moral rights of integrity and attribution in how copyright is protected within their own legal system. The Berne Convention has helped protect economic rights for both local and foreign owners. Given the Berne Convention, all things are copyrighted the moment they are written, recorded or produced, and no copyright notice is required. A similar agreement, the Madrid Convention, which aims to protect the international coverage of patents and trademarks, has also been established.

It is worth noting that there are some subtle variations between the rights of parties such as employees and freelancers. With regard to employees, if a work is made by them (rather than by a freelancer/ contractor who works for himself or herself) in the course of their employment and as part of the employee’s usual duties, the first owner of the copyright will usually be the employer. For the freelancer or subcontractor, the situation is different. Generally the freelance creator is the first owner of copyright. The person who paid for the work to be made is generally able to use the work for the purposes for which it was created but may not be entitled to use the work for other purposes. Let us take the example of a freelancer who creates a training manual for a client. The freelancer is the owner, unless the contractual agreement specifies to the contrary.

When it comes to the Internet and copyright there are a number interesting comments worth making. Again check these observations with a local legal expert in your state or country. It is better to be safe than sorry.

In regard to work on the Internet, unless a person places words like ‘I grant this to the public domain’ you must assume the work is copyrighted.

Cases in the USA are increasingly proclaiming that once information is placed on the public part of the Internet it ceases to be confidential. Of course, if it got there by an unlawful disclosure that may be another matter.

All e-mails you write are copyrighted. However, suing over an ordinary message would be unlikely to attract any commercial value. Unless the material is secret or has IP protection the law normally does little to protect people’s rights. When it comes to IP law, computers do not make copies of information, only people do.

Copyright does not stop you expressing your views on other people’s work, only the ability to express the intent or exact wording of the original work and damage the commercial value of it. This helps safeguard the right of the creator to have some control over how their work is used.

Having a comprehensive innovation strategy

In addition to excellent IP protection, the commercial reality of your ideas will come down to the quality of your innovation strategy. Your business may have a brilliant idea, but that will not be enough. You will require know-how of how to develop and market the idea commercially. This could involve a number of disciplines, including research and development, marketing, financial management and manufacturing.

It will be no surprise to you to learn that developing a new product and service is at the high-risk end of innovation. Very few inventions pay their way. In fact, the vast majority of product development in the marketplace occurs when people see an idea and improve on it. Only a small minority could be classed as truly breaking ground.

When it comes to manufacturing, some inventors or creators try to find a manufacturer to make the product under licence, where they pay royalties. But finding such support can be an overwhelming task. To do this you could consider using the services of an invention promotion firm or, in the case of being an author, a literary agent. Again, one should tread carefully. Some operators who say they are there to help you, start with a series of glowing remarks about the market potential of an idea and then, before you know it, their fees get higher and higher. Before getting excited about the hype, do your research on their track record and the legitimacy of their business. One key question you might ask is how many of their clients have made the grade and generated money? Be wary of any unsubstantiated claims; find out what their clients are saying about them. A ‘tell tale’ indicator of a poor operator is that they make massive claims about your idea without serious technical assessment and they want an upfront fee. So avoid paying upfront fees.

Often, it is difficult to distinguish between a fraudulent invention promotion firm and a legitimate one, perhaps because unscrupulous and honest firms often use many similar advertising and sales techniques, market evaluations and contract strategies. They often use a toll-free number and mostly target independent inventors.

In consumer protection legislation, businesses are often required to report on the number and percentage of successful clients, that is, where the client has made more money than the fees they have paid. Again, use a reputable attorney or solicitor to safeguard your interests.

To summarize, there are a number of smart things you can do to make the process of innovation a positive and enjoyable one:

Ask for proof of claims, including special relationships with appropriate manufacturers, before signing any contract.

Before having a market evaluation report undertaken, ask what specific information will be included.

At a very early stage enquire about the total cost of services. Avoid paying any upfront fees. The more reputable firms rely more commonly on the royalties that arise from a successful licensing.

Make sure your patent is watertight by making sure that no other party has access to this idea.

Check with Consumer Protection to learn if a business is obligated to disclose success and rejection rates. Rejection rates are a percentage of all ideas or inventions that were found unacceptable. A low rejection rate would indicate that an invention promotion firm is not being tough enough on whose case they are supporting.

Tune right out of high-pressure sales tactics.

Contact Fair Trading or Consumer Affairs to learn whether there are any unresolved consumer complaints about the firm.

Make sure your written contract contains all the agreed terms before you sign. Have the agreement reviewed by a legal adviser.

Summary

Protecting IP is an essential element of innovation and business development. Whether you are writing a novel, designing a web page or working on the latest advances in biogenetics, taking the trouble to understand IP is very important. It is part and parcel of winning the knowledge game. You need to make sure you protect your rights, reap the rewards and minimize risk. You may also need to consider writing confidentiality agreements as well as verifying the claims and reputation of those with whom you are working. Most important of all, the area can be quite complex so make sure you are able to obtain the right standard of legal advice.

Chapter 11: Leveraging Digital Technology

Overview

I don’t understand the technology but you don’t have to, you have to understand what it can do for you.

(Rupert Murdoch)

Leveraging digital technology requires:

moving past the hype

shopping around to get the best fit for your business

creating web gateways of mission-critical knowledge

tuning into collaborative technology

careful research and team consultation.

Travelling at the speed of light

As you read the latest IT supplements or visit a computer store, you cannot help but be impressed by the number of new applications and how fast things are changing. What was state of the art only three months ago has now been superseded. We are living in a digital marketplace that is travelling at the speed of light.

It is natural to feel somewhat intimidated or nervous by such huge change, particularly when you feel that you may be falling behind or losing your competitive advantage. This unease is often fed by the unsettling dilemma of deciding whether you should invest in new technology or stay as you are with your current platform, infrastructure or system.

To use a golf analogy, see digital technology as supplying a few additional clubs in your knowledge, learning and business golf bag. Just because your number of clubs continues to grow does not necessarily mean that your game will improve. We must perfect the art of using the clubs we acquired before our game can progress.

If your business wishes to grow competitive advantage it will need to use technology smartly as a means to improving connection and the quality of interaction between the right people at the right time. We need to accept that nothing will ever replace the intimacy and chemistry of face-to-face communication, but what the latest digital technology can provide is the opportunity to connect with new people and thinking twenty-four hours seven days a week. So go out, enjoy the technology, but realize that we are by our very nature social animals and need stimulation, interaction and teamwork for true learning to occur.

In deciding which technological path is best, a business needs to get past the hype and pressure of acquiring the latest killer application and learn to ask the right questions. It is very easy to be hooked on the latest features but miss the central point, which is, how can technology help you improve your business performance? Without this focus you can easily become sidetracked and not reap the benefits you are seeking.

Not surprisingly, when it comes to trying to understand the trends in digital technology many people bury their head in the sand. They prefer to hide rather than have a discussion with a person who may embarrass them for not knowing the latest buzzword, brand name or feature. This, of course, is exactly what we should not be doing! We should put any personal insecurity or feeling of inferiority aside and go about creating knowledge-friendly systems that really work. In some cases we may take on this challenge ourselves but most likely it will be with a team of skilled helpers.

A few years ago I attended the American Society for Training and Development conference in Dallas, Texas. A panel discussion on e-learning was held with some of the heavyweights of the field, including a key industry researcher. After about twenty minutes of discussion on future trends, one of the panelists read the mood of the room and said: ‘You may not believe this but we are confused too’. This created tremendous laughter on the panel and a collective sigh of relief from the audience. We all recognized that we were trying to make sense of something that is very difficult to scale, box and package. The fact is that even the experts are confused, so be kind to yourself and explore the business boundaries and trends but do not become paralysed by them. Take a more relaxed approach and open your mind to new avenues and possibilities without the self-imposed pressure of having to find the perfect answer.

To help you begin or continue your own exploration of the digital technology here are five trends that many people and experts believe will most impact on knowledge, learning and innovation in the years ahead.

1 Smarter knowledge platforms

By 2010 the majority of world businesses with over 500 employees will use IT platforms to collaborate, share and innovate with employees, customers and business partners. These digital platforms will cast their web much further than their existing boundaries of digital support to include people from diverse industries, languages and countries. For example the International Data Corporation predicts that by 2004 most businesses will include suppliers, customers and business partners in these systems. By 2008 advanced searching capacities and access to remote and wireless devices such as palmtops and mobile phones will massively expand the coverage and range of access of people to business learning, knowledge and performance systems.

These observations are backed by the current growth rates of mobile and hand-held devices of 12 per cent per annum. This far exceeds growth in traditional personal or desktop computers and land-line devices such as normal telephones. Wireless and mobile access to knowledge by capabilities such as Blue Tooth Technology (www.bluetooth.com) is creating profound changes in how future businesses are behaving, connecting and co-operating. This is now evidenced by a rapid increase in businesses and educational institutions using wireless video-conferencing, e-learning and short-message systems in their day-to-day operations. Heineken, Haagan-Dazs, Costa Coffee and Coca-Cola, for example, are conducting trials on how instant and short-messaging systems can support management, customer loyalty and overall productivity initiatives.

The result is that you no longer need to connect to a telephone line or to a PC to talk, see and interact with someone. You could be sitting in a park and undertake an e-learning course, be part of a web conference or do a search on the Internet or company database. All you need is the right input device and back-up technological support, and off you go. Already the total number of wireless devices in the world, such as palm-held devices, wireless connections and mobile phones, outnumber wired units like PCs and land-connected telephones. So the trend is set to continue.

During the next few years digital platforms will continue to be more flexible, responsive and intelligent. Internal web sites (that is, intranets) will no longer be an archive of data but will increasingly become a resource full of instant mobile learning, shared productivity tools, performance help and human connection. Digital capabilities such as customer relationship management, intelligence gathering, data mining, web conferencing, sophisticated searching and e-learning will be part of standard web-enhanced packages. For example, call centre staff are now able to action enquiries with the help of instant expert assistance and customer details when they interact with their customer.

Gone will be the days of struggling through countless web pages or files to solve your problem. Future knowledge systems will be unified and consolidated to ensure better stand-alone solutions and delivery to all parts of the business. Depending on your business model, this will mean improved business to employee (B2E), B2C and B2B learning, service delivery and performance.

2 Digital e-learning blasting off

In the past few years there has been much talk in business about the benefits and growth of e-learning. Depending on the survey consulted, the world market is expected to reach up to US$23 billion by the end of 2004. According to the International Data Corporation the fastest growing e-learning market is Western Europe, with North America still holding market dominance of two-thirds.

There are several recent developments that are fuelling these trends. First, the design which is at the backbone of much of the e-learning (that is, learning objects) is now more widely used in a large number of applications, platforms and collaborative technologies. Second, advances in authoring languages, natural speech recognition and wireless mobile access has meant many more people are able to participate in this revolution. Finally, the look and feel of e-learning is fast becoming more flexible, engaging and memorable, while from a learning perspective there has been a much higher standard in how the needs of learners are understood, matched and met.

In the years ahead the appeal of e-learning will broaden and expand to many new areas, away from the already popular business and IT skills to new fields such as self-management, financial budgeting, hobbies and career assistance. Again e-learning will not be just a vehicle for delivery of courses but will provide a wonderful opportunity to connect people and foster learning and innovation by a range of services such as web conferencing, discussion groups, chat, courses and telephone link-ups as part of a total business solution.

In the area of customer learning the growth figures are particularly exciting, as the benefits of customer education and assistance are now being realized. Benefits include maintaining customer loyalty with more educational and informative relationships, up-selling to new products and services and, finally, being able to reduce the costs in pre- and aftersales support.

As more people become comfortable with the technology, undertaking a two to five minute e-learning lesson will be a natural part of daily life, whether you are undertaking home renovations or you are trying to solve a complex problem while on the job. As will be discussed in Chapter 13, modern e-learning is more instant and user friendly.

3 Greater personal choice

The increased accessibility of the Internet means that knowledge and learning can be a twenty-four hours seven days a week opportunity, whether you are at home, on the road or in the office. With this comes an increased chance to personalize your digital experience. This can already be seen in the world of interactive digital television. Whether ordering groceries, playing games, receiving a music review, sending an e-mail or being part of a chat room, people’s choices are highly individualized. It is estimated that by 2005, 65 per cent of UK television audiences will be using interactive digital television (idtv) in their homes.

For business, personal choice in the future will mean making sure people are serviced with interesting and useful knowledge. If you fail to do this, people will quickly look elsewhere. In most cases they will expect such services for free but will be prepared to pay if the value to them is there. So, whether you are reaching people by a home entertainment system, PC or instant message facility, great care must be taken to

personalize the information people receive. The more intimate and useful the knowledge, the more likely you will grab people’s attention. This, of course, applies to employees as well.

However, in saying this, access does not necessarily mean better learning or greater involvement. The better business solutions will be backed up with professional and personal support from a human being when and if it is required. This could be answering customer questions, providing e-learning or assisting collaboration on vital areas of mutual interest.

4 Variable bandwidths

High bandwidth cable access as well as satellite systems are now becoming an essential part of modern business practice. Without such capabilities many businesses are finding it is very hard to compete and keep up to date. For example, in South Korea it is estimated that 84 per cent of people will have broadband by 2004. Such growth rates are also being experienced in other developed nations. Of course, in developing countries or isolated locations the picture is starkly different, with the vast majority of people still having difficulty accessing a telephone. In the case of South Korea, a major driving force has been active government intervention to subsidize cable in its endeavour to push digital television. Also, being of a relatively small size geographically has significantly aided the high take-up in contrast to Australia where the growth has been hindered by vast distances.

However, in the short term when it comes to leveraging digital technology business we must anticipate that users could be using a range of bandwidth frequencies from 28K modems to higher levels. Given this reality, we need to position what we package in the right form and in the right media. In the longer term, as broadband and satellite access becomes commonplace, the choices and avenues for collaboration, education and connection will expand enormously. I am excited by the potential of using wireless access as a gateway to learning in the next decade, particularly as the cost of remote hand-held devices come down and access to instant knowledge and information becomes easier and more sophisticated.

As the coverage and uptake of bandwidth increases and the capacity of wireless and wired devices improves, so will the degree and sophistication in multimedia. In the mean time plenty of creativity and imagination is needed to maintain curiosity and interest in the narrow range as well as stimulating the senses at the higher ranges. Closely associated with the emergence of high bandwidth is the ongoing improvement of networks that govern how the Internet works and connects. The current research and development on creating the next generation Internet, Internet 2, is expected to operate at least 100 to 1000 times faster than the current Internet.

5 Common standards and protocols

One of the most frustrating elements of the digital age has been the diversity of applications, software and infrastructures, the result being a saturation of different products, services and labels that confuses business and inhibits the potential of digital technology.

The good news is that in future the choice will be somewhat easier. There has been

increased vendor agreement in recent years to develop packages on common industry protocols and standards, thereby improving the capacity for different technologies and platforms to work together. Already providers such as Oracle, Peoplesoft, Microsoft and SAP have made moves in this direction, the result being a higher capacity to improve and expand the capabilities of the current system without throwing out the better features of the existing one.

An important reference point for protocols for integrating hardware and software is located at the World Web Consortium at www.w3.org. At this site a panel of experts constantly review and update accepted industry protocols. One recent tension point in the area of standards and protocols has been the difficulty of cross-platform capability for reading web pages. Microsoft Internet Explorer and Netscape, the two most widely used browsers, have their own proprietary features and thus there are still differences in the way that each browser behaves for the customer. This is particularly important given that there can be inconsistency in how the web is received depending on the software being deployed.

Another area of standards is in authoring language. In the future more advanced versions of the authoring language XML will make the role of searching and finding data and knowledge so much easier. Irrespective of the brand of technology that you are using in your business, you will be able easily to link knowledge and combine know-how. In the area of e-learning similar explorations of standards and protocols are also being explored. Again, in Chapter 13 the emerging standard for elearning called SCORM (shareable content objects reference model) will be discussed.

Finally, a conversation on common standards and protocols would be incomplete without raising the subject of ethics. Given the power and reach of global technology, consumers, lobby groups and governments are now raising enormous concerns about privacy and the rightful use of technology. Expect much tougher and wide-ranging international laws and treaties in the future. If you have not done so already, be ready for a much higher level of business governance in how you link in and use digital technology. This may mean taking a stand against spamming, avoiding unsolicited advertising or other unethical practices that may hurt your image, reputation or profitability.

Getting value for money

Having available learning and access to knowledge at any time, anywhere and at less cost is a very attractive proposition. The evidence here is compelling. After the initial outlays, digital technology can provide major savings in how you share knowledge and engage learning. You only need to consider the savings you could make in travelling costs and reduced downtime on the job to see the potential.

There are many successes in the world of business. Examples include:

IBM who saved US$200 million in one year with five times the training and at one-third of the cost

CISCO Systems and Dell Computers which are close to doing 100 per cent of their training on-line

National Australia Bank which is expected to save US$1 million in the next two years with a blended solution combining face-to-face and digital delivery

Procter and Gamble which with collaboration technology has been able to secure a 50 per cent reduction in new product concept and development time.

Steven Melville, the managing director of Ingena, estimates that a large national or multinational organization can typically deliver anywhere from 50 per cent to 80 per cent of their learning in a digital manner, generating multimillion-dollar cost savings in only the first year. Such figures are no doubt impressive and we can expect to see many more businesses lining up to build a faster and more efficient digital system which can build talent, stimulate innovation and stronger partnerships with key parts of their business.

However, again a word of caution. Digital technology is only one part of the equation if you wish to grow your competitive advantage. You need to win over people’s hearts and minds to digital technology as well. Delivery or accessibility does not necessarily mean that performance improves or better learning takes place. Just because someone has access to on-line or wireless learning does not mean they will use it. In many ways business must learn the lesson of focusing less on technology and more on human emotion if it wants to succeed.

This observation became clear to me recently when I helped a close friend do their first on-line e-learning programme at home. As a bystander I was curious about the quality of learning and its perceived value. First, being new to e-learning, my friend found the level of responsibility much higher than she had previously expected. She had to take extra time to discover how to use the system, as well as organizing her life so she could fit her course demands into her other interests in life. She also had to have the self-discipline to put aside time at home in her private time to tap into the service. She claimed that these demands were much higher than she would have encountered in the more traditional face-to-face learning situation. After a while, not surprisingly, she began to lose interest. She also claimed that the material and training on the e-learning package was at times a little silly, cold and impersonal. She began to miss the experience of face-to-face learning and eventually, when it came to the last assignment, she asked me to help her so that the experience could be completed quicker.

This story of my friend’s experience raises a whole list of issues pertaining to learner initiative, motivation and assessment. In this case my friend did not find it a positive experience and was not keen to reenrol for anything else, even though the service was available free. If she chooses to do another e-learning course she should probably choose another provider. Of course, many of her reactions have a very strong parallel to those which are often experienced in any distance or external education programme such as a traditional correspondence course. However, without doubt, digital technology is placing new added pressures on the modern learner which cannot be ignored. I know there are better examples but, given the growth of e-learning, each business needs to be ready for the real possibility that e-learning may not always help your people or the business. We also need to remind ourselves that we are competing for people’s attention, not because people are lazy or unmotivated, but because they are busy doing other things.

As a postscript to my friend’s experience, when the course deadline had passed, we discovered that only 10 per cent of the thirty-five people who enrolled completed the scheduled learning on time. This low statistic does again raise issues regarding the perceived worth of the programme and what barriers or obstacles were experienced. With hindsight, there are many things that could have been done to help my friend. For example, starting the course with a face-to-face meeting, praising her more during her progress, coaching her on how best to handle the study and ensuring she had the basic computer literacy skills would have helped. As Colin Pitt from St George Bank says, some people love it and others do not like it too much, so you will need to have face-to-face learning as well.

Again remember the business needs to drive the agenda and do not be paralysed by the latest features, tools and content. Your attention needs to be firmly focused on how technology can lead to better knowledge sharing and business performance. As a rule of thumb, at least 50 per cent of the investment of any budget outlay should be spent on research, change management, education and communication. People often make the mistake of concentrating too much on the hardware and software and not enough on shaping a new attitude to doing business.

It is also worth noting that you may not have to spend a fortune to get a suitable system up and running. This is highly relevant for small to medium-sized organizations, particularly if the business has low staffing levels or there are already established protocols in how knowledge is shared. In some cases, the platform and infrastructure that drives your service might lie at a remote location and be managed by a third party. In the modern digital era there are increasing choices on how others can help you personalize your approach without you needing to invest in establishing and maintaining the service yourself. Examples could be learning management systems or hosting learning portals, automatic administration functions and more sophisticated infrastructure collaboration capabilities such as threaded discussions, chat rooms and file sharing. In this regard, a fee will be required and the pricing can vary from a monthly account to an annual payment but it may well be the most cost- and resource-effective way to proceed. Finally, if you know how the World Wide Web works, you will be aware that there is a gold mine of free resources and software available. With a little know-how and help you can make excellent savings.

Building the best system

To leverage the full potential of digital technology it is essential that you hold meaningful conversations with the various parties, interests and customers. It is here where most interventions go wrong. Any change in technology requires an agreement on what needs attention from a wide range of people.

This means having a team-based approach to the design, implementation and evaluation. We need to remember that digital technology should not be an IT project; it must be a business project. As has been discussed, winning the knowledge game is about having a sharp business and customer focus driving the change. As a result you will need to bring together people who have a stake in its success, so that vital decisions and system requirements can be discussed. In larger businesses this will often mean setting up a team of managers, customers, human resources, IT and senior executives. If you are using external services and hosting, they must also be part of the conversation. Partnering is the name of the game. You must ensure that the driving issues are shared collectively and key players are actively involved.

These discussions will require skilful facilitation and senior executive backing. Each party will need to understand the specific constraints and opportunities being considered. Current hot issues will also need to be clearly understood. You will need to build flexibility into your plans by ensuring that you have a new digital platform that can be easily updated with changes in software, networks and bandwidth. This means making sure adequate consultation, user support and integration is organized and carried through.

In some cases expertise will need to be hired or recruited to make the process happen. Again the big danger is that the process is hijacked by a single function, person or vendor and the shared purpose required for committed implementation is lost. Digital technology is too broad and important for that to happen. Business imperative, teamwork and leadership are the name of the game.

Here are ten questions that you may need to spark during these exchanges:

What is the business challenge?

What existing technology systems and plans are in place?

Which capabilities must we develop as a matter of priority?

What style and type of digital approach do we need?

What are the learning styles and needs of the people involved?

What are the benefits to staff, customers and business partners?

How open are people to new technology?

What percentage of your budget is spent on new system development?

What protocols and ground rules are we going to use?

What are your system requirements?

As you would expect with so much change in digital technology, keeping a handle on what constitutes a good knowledge-based digital technology system is not easy. However, pooling expertise, building shared understanding and testing assumptions are the precursors to developing a better solution.

The good news is that as standards and protocols improve, so will the flexibility to build a better system. Knowledge management digital platforms already include many capabilities such as:

access, retrieval and storage of documents

appropriate security

communication and collaboration

competitive intelligence

content repositories, archives and management

chat rooms/discussion/file sharing

course catalogue and on-line registration

customer relationship management and feedback

electronic news, content and multimedia feeds

e-mail and collaborative capabilities

facilitating and supporting communities of practice

filtering and upkeep of learning resources

launching and tracking learning

new learning and knowledge creation

integration of business systems and work flow

mapping tools that help you find the right person/expert/authority

performance support

search and retrieval engines.

As has been discussed, expect major changes in how knowledge is being shared. It will be done in a far more entertaining, engaging and immediate way. The whole premise of learning and keeping up to date will have a different look and feel. Watch in the near future how the fields of knowledge management, learning, competitive intelligence, entertainment and customer service will become increasingly merged into a single architecture or platform. For the employee and customer this means immediate access to knowledge that has never been experienced before.

For the record, the current approaches for knowledge management for business could be broadly summarized as a database approach using providers such as Oracle, Sybase and Siebel or a business building an extensive archive of contacts, files and records with a

search engine on top of it. Lotus would be an example of a provider who helps in this approach. As was discussed in Chapter 4, people can now download vital files and messages from remote or business premises. In the marketplace there are many commercial and public providers who can help you search and organize your knowledge. If you would like to learn more, visit www.searchtools.com, www.vignette.com and www.broadvision.com to study this emerging field.

Of course, if a system is full of poor archives and content, a wonderful infrastructure will not help you. Remember it is not the glitz that matters but careful planning, consultation and evaluation. As you would expect, the criteria for building good digital systems include not only the common ones of cost and speed, but also issues such as the capacity to present knowledge in a variety of short and meaningful ways.

Now more than ever, digital platforms are helping people shape a different approach to their business and fundamentally change corporate culture and relationships with customers. In a recent case study in the Institutional Banking division of Westpac they described their goal as being for single-desktop users to be able to source all relevant customer details while also detecting who else had been doing similar searches, in this case leading to a higher potential for future co-operation and smarter thinking within their business. Advances in searching, mapping and understanding customer preferences via data mining will also continue to lead to breakthroughs in how customers needs can be addressed as well as providing greater opportunities to discover unnoticed pearls of wisdom. Pfizer Inc., for example, discovered through searching millions of screened compounds in clinical trials that Viagra had interesting side effects which generated a new line of investigation. Viagra was originally the subject of trials to fight angina before being used as a sexual stimulant.

Without doubt, digital technology is having a profound impact on how knowledge is shared, stored and accessed. This new and modern world of cyberspace is one that opens up enormous possibilities for connection, collaboration and teamwork. Gone are the days when a business could rely on its own small network of a trusted few to get things done.

New generation portals

Discussion on leveraging digital learning would be incomplete without exploring how changes are occurring in the world of learning portals. A learning portal, or what is often called a learning hub or weblog, is a web site that customizes a one-stop shop of vital contacts, resources, performance tools and e-learning.

The term ‘portal’ reflects a move away from electronic versions of business information to a haven for collaboration and knowledge sharing. Again the facilities can include communication facilities, data stores and software applications. These services could be available via an intranet to people within a business, or available to approved external users such as customers, suppliers or business partners. These portals are either open to anyone who might be interested or might need permission to use them.

A well-presented and well-organized portal can provide a gateway to a whole range of people, including customers, employees and the community at large. In this context a portal could be defined as any web presence that helps steer people to multiple sources of mission-critical knowledge. The term ‘portal’ here is being used quite liberally and can mean a wide range of things to different audiences and could be the front edge to a system that drives knowledge and innovation. Without getting too caught up in the evolution of language, it is more important to see the underlying trend, that is, the desire to aggregate assistance, learning and knowledge into a central point where important discovery and human connections can be made.

To help you get a sense of learning portals, here are some examples you may wish to visit on a diverse range of topics:

About – Human Internet at www.about.com

Education World at www.education-world.com

IT Skills Hub at www.itskillshub.com.au.

Not surprisingly, the growth in portal providers has been very high as it helps to simplify and consolidate the best resources and gateways for winning the knowledge game. In many cases businesses have teamed with external third party portal providers who help to consolidate resources and permit access to vital knowledge and collaboration opportunities. These strategic alliances not only save time, but also help kick-start the creation of a solid framework for learning, discovery and connection.

As you would expect, depending on your business needs there is a wide diversity of features and related web-based applications that can form the basis of such a service. Again it is important to see portals as just another way to win the knowledge game by sharpening your focus and positioning your knowledge. To do this you need a well-hosted solution and the management of it needs to be first class. The advantages of well-designed portals can be numerous, particularly if people are able to obtain mission-critical knowledge on learning hot spots. Conversely, portals that lack quality control and fail to adapt to business and learner needs will quickly lose value.

In terms of businesses that use this approach, one notable example is the chemical company, Buckman Laboratory, which was highlighted in Chapter 6. Buckman have built a

portal that includes a wide variety of on-line services. These include customer service, technical experts, laboratory analysis, safety and environmental services, product development teams, problem-solving workshops and change management seminars, and their corporate university, Bulab Learning Centre, provides e-learning in a range of different languages, disciplines and technical areas. There is also access to on-line degrees and higher education.

Web-enhanced collaboration

We have entered a new era of cyberspace where collaboration technology will dramatically help to share ideas. With a minimum of a 56K modem you can start to participate.

For example, Procter and Gamble currently use a business system built on Lotus Notes to connect over 93 000 employees. They provide employees with a host of resources from the latest product knowledge, competitor advertising, market news and virtual meetings on the latest hot topic.

Like many people, my first exposure to web-enhanced collaboration was Yahoo. There you can join a discussion group, enter chat rooms or create your own discussion space for people to join in, either by open choice or restricted invitation. As I have found out, this service is one of many and there are numerous providers, some with far more advanced features and services. If you are lucky enough to be part of a community or business, you may have access to far more elaborate net meetings and collaboration applications that everyone can use and share at a higher level of intimacy and interaction. How is this for a list: videoconferencing, Internet directories, application and desktop sharing, chat, visual tools such as mind mapping and whiteboarding? Examples of collaborative technology include WebEx, Telepost, Placeware, Help Meeting, Evoke, Web-4M and NetMeetings. Take a moment to visit http:// netconference.about.com for extensive listings, resources and ideas.

Of course, having access to such web technology is no panacea. You need to learn how to use the innovations smartly. Such services can vary tremendously in price and quality but, without a doubt, web conferencing and collaboration by the net can save travel time, help meet deadlines and connect you to a range of people in a variety of locations. In saying this, you will need to ensure that people have the right software, platforms and access before proceeding.

It is amazing how quickly you learn when you experiment with new technology. Here are some tips that came from my involvement in a recent text-based chat session on an e-learning course:

Set up five minutes beforehand and ensure you have managed your time so you can concentrate on the proceedings.

If you have more than three people involved, make sure you appoint a moderator.

The moderator is normally the person who calls the meeting.

Keep the sessions short (twenty to thirty minutes).

Set up a formal agenda after consultation prior to the event.

If you have a question for the whole group or an individual keep it short and to the point. (Again different software has different options and choices.)

If you have to leave, let people know and, likewise, when you return advise them accordingly.

Keep to strict time frames and allow some time upfront to socialize and bond.

Make sure you follow up the meeting with action plans and outcomes.

Putting your business case together

If you undertake careful research on your needs and choices, you should be well placed to put a proposal together to get the funding and backing you require. If the consultation process has worked, issues such as system development and managing change will have received a great deal of discussion well before vital decisions are required.

A good proposal not only details the obvious cost benefit of an initiative, but also helps paint a picture of what might happen to the business if the implementation and roll-out is a success. Here I would encourage you to establish a mission statement for your key idea. In fact, a mission statement – a short statement that articulates the business, purpose and values for the project you propose to introduce – is a great discipline in any project you may be involved in. A mission statement helps crystallize your thinking into one distinct statement. A mission statement should answer the five questions:

Why are you here?

Who are you serving, that is, customers, employees, suppliers or business partners?

What do you want people to accomplish?

What will keep a person using your service or product?

What will encourage them to return?

Here is a mission statement which I recently wrote for my business web site at Alastair Rylatt Consulting (www.alastairrylatt.com). It is my intention to achieve this mission in the near future.

The web site of Alastair Rylatt Consulting provides world class assistance to clients and the web community on finding better solutions to the learning challenges facing the modern workplace.

To achieve this mission this new site will provide a blended e-learning solution to assist on-going discovery and innovation. Features will include a workplace learning help desk, Yahoo discussion group, web cam services and elearning lessons and supplement my existing services and products.

When it comes to obtaining backing for your proposal, having sound logic may not be enough; you will need to appeal to people’s emotions and egos as well. Your business case has to be tailored to the wishes and personality of your key decision-makers. As indicated previously, there is ample evidence available that can sell the advantages of digital technology if you wish to draw people’s attention to it. You can supplement this hard data with testimonials, case studies, presentations and demonstrations. Phrases like ‘return on investment’, ‘higher levels of performance’, ‘enhancing business capability’ and ‘tossing out bad systems’ are likely to get a receptive hearing.

In terms of gaining support, do your decision-makers need a short and sweet proposal or do they expect a fuller and more comprehensive report? All this is highly relevant, not to mention the emotional reasons for making a decision, such as winning, being leading edge or improving one’s image and reputation.

The fact is that lobbying might be just as important as cold hard statistics. Past experience can be a great help as it can indicate to you how decisions are made and what are the key arguments that receive high praise. If you get a rejection be prepared to repackage or try again. See negotiation as a process not a single event. This may involve better demonstrations and clearer training so your audience is better able to make a decision.

Most importantly, digital systems must be up and running very quickly. Having designers spend two years developing a system is a luxury of the past. You need to make a start.

The final format of the proposal will depend on how decision-makers want things to be discussed. Listen carefully and package your proposal in such a way that makes the decision-makers’ job easier. However, do not ‘hide elephants’; make sure there is critical understanding on issues such as timetables, resource requirements, downtimes and evaluation. This will help you to save money as well as make a sound investment.

Summary

Digital technology can make a world of difference to the knowledge capability of a business. For your business to reap the rewards you need to see past the hype and explore how business performance can be improved. This can only be obtained by having conversations with the various stakeholders affected by the proposed changes. Particularly important is drawing attention to the social nature of learning and not just the technology. Specific trends that will have a profound impact on winning the knowledge game in the next decade include wireless delivery of learning and smarter, better integrated digital platforms, learning portals and web-enhanced collaboration. In the next five years there will be profound changes in how people experience and access the digital age in all forms of business, community work and entertainment, whether they are at work, at home or travelling. So, be ready and be part of this exciting trend.

Chapter 12: Increasing Customer Loyalty

Overview

Focus on making your customers’ lives better. If they can’t see that your innovation is going to make their hotel experiences better or their game experiences better or their shoes better, you might as well stop now.

(Beth Sawi)

Increasing customer loyalty requires:

building a positive emotional bond with each customer

learning how to generate higher customer value

strengthening co-operation between data mining and marketing campaigns

mixing digital technology with live customer support

knowing how you stand on moral and ethical issues.

Improving customer value

Whether it is a small business such as a local pizza shop, the members of a tennis club or users of a large mobile phone network, customer loyalty is everything. Outstanding customer service requires an attitude that is not aloof, arrogant or out of touch. Business success is determined by its ability to nurture intimate, two-way learning relationships with their customers. This is the distinguishing factor in the modern marketplace. We must all be directors of first impressions in every dealing we have with each customer. As Esther Orioli from Q-Metrics says, customers do not remember logos or catch phrases; the new economy is built on relationships. So if you wish to win the knowledge game you must always have the customer clearly in your sights.

If the customer knows about you and you know about them, you are both better placed to share the spoils of exchange. The goal is not about selling for selling’s sake or simply giving advice, but is about improving long-term shared value. This shared benefit far transcends the value of the current transaction. It moves beyond just price to providing strong guarantees, added benefits and back-up support.

In most cases you want people to return as passionate fans who vividly remember their last positive experience. This is vitally important in a twenty-first century e-business model where it is so easy to shop elsewhere or bypass traditional retail and distribution outlets if someone so desires. In most cases, people now expect to be involved in a partnership that counts on their input and involvement.

In reality, how well a business treats its customers will indicate how well it grows its competitive advantage or advances its reputation. This is increasingly important in a marketplace where people are expecting the very best with no unpleasant surprises. This view is supported by a 2001 Accenture study that found 91 per cent of Fortune 1000 companies said greater focus on the customer service experience and building customer loyalty is most critical.

In modern times business must adapt to a sophisticated and/or fickle consumer who in many cases knows, or pretends to know, more about your product or service than you do. An example of the power of customer knowledge can be seen in the purchasing of cars. If you are looking for a car with air conditioning and a CD player, a consumer can browse the Internet for the exact vehicle they are seeking on the day they are in the market. When it comes to negotiating with a dealer, they are coming to the table from a position of greater knowledge. This shift in consumer power means that the salesperson or call centre staff often can be less well informed than the customer. You only need to consider how easy it is for a consumer to be in the know very quickly, by using consumer magazines, reference journals, books, networking, web chat rooms, discussion groups and searching the World Wide Web, to understand how the power has shifted. Just ask your local doctor about the level of research carried out by some patients before they walk in the door. They are armed with drug names, side effects and their own medical history. So managers and their staff had better be ready and, if nothing else, should treat customers with respect whether their knowledge is accurate, inaccurate or they are trying to bluff their way through.

In addition to the shift in consumer power, businesses are constantly exploring new ways to position their products, services and know-how in the marketplace. The result is a

constant battle to influence consumer behaviour and grab new business. This is not surprising, given how society is swamped with so many brands, logos and promotions on a daily basis. Business needs to be far more personal and clever in how it relates to your customers. The same can also be said of how you treat your employees, suppliers and business partners. As Bryan Bergeron in his book, The Eternal E-Customer , says, loyal customers are like loyal friends and loyal employees, they cannot be bought, they can only be developed.

For more facts about consumer trends and loyalty, explore Table 12.1.

Table 12.1: What the latest consumer trends research tells us

Vic Hunter, author of Business to Business Marketing, claims it is thirty to forty times more expensive to acquire new customers than it is to manage existing ones.

On average, satisfied customers tell between a quarter and a half the number of people as compared to dissatisfied customers. However, the good news is that, if you handle complaints quickly and well, 95 per cent of dissatisfied customers will become loyal again.

James Rosenfield in his article, ‘Customer focus-pocus ’, makes the important point that traditionally in industrialized economies, customers tell fifteen people about their experiences. Now with one keystroke the customer can tell 150, or 1500 or 15 000 people, not to mention the potential impact a phone call to a local radio or television station can have on your business.

People tend to stay with the same brand unless they are dissatisfied. They like brands with a good reputation because it makes them feel safe and helps them manage complexity. This can be seen in the supermarket where the Food Marketing Institute says the amount of time people spend in a supermarket has dropped in the last ten years from an average of forty-two to twenty-eight minutes. People are opting to choose a known brand and get out quicker. Similarly, customers on the Internet prefer to use trusted providers such as Yahoo, AOL and Lycos. For example, in Australia in April 2002, 66 per cent of Internet users visited ninemsn, as against 55 per cent one year earlier. e-Marketer Inc indicates that the best click-through rates for e-marketing on web sites are now well under 5 per cent. For example, permission-based e-mail is 3.2 per cent, non-permission based is around 1.25 per cent and banner ads on web pages are around 0.3 per cent, so the news is not good. In more recent times, European trials of direct short-messages system marketing to portable hand-held devices is claimed to be over 15 per cent, most likely because it is novel.

Seven hot tips for better customer relations

To help you improve customer loyalty let us take a moment to explore seven tips which can lead to higher levels of customer relations. You will find that these messages will not only benefit your customers, but will help you in your relationships with employees, suppliers and business partners. In each of these tips, how well your business learns and leverages its knowledge is central to success.

1. Maintaining high levels of customer value requires ongoing intimacy and joint problem-solving. Business needs to move away from a world of just serving customers to one that welcomes feedback and works together to make lives easier, more enjoyable and more profitable. This requires the utmost integrity, flexibility and empathy. The better people understand the needs and interests of your customers, the harder it will be for other businesses to cash in on your hard work. So, learning, education and feedback is the key.

2. Managers need to be skilled to meet two quite different expectations from customers. The first comes when a customer has an expectation of what will happen next after they acquire your services or buy your products. This is heavily influenced by past experiences and your track record. If you have a good track record, you are off to a good start. If you do not have a good track record, you will need to address this issue first. Ignoring it will not help. The second expectation revolves around what the customer view is of how well they believe your product or service will work in practice. Here you will need to convince them of the benefits such as ease of use, saving time, money and effort, and the quality of your product. Then you will need to back this up with consistent and high-level delivery. As Dr Ken Blanchard says, your job is not only to meet or exceed these expectations but to create a raving fan.

3. Take the time to write a customer service objective, including considerations such as: product and service, the type of relationship you are seeking to deliver and, finally, the qualities of the brand, image or reputation. In shaping your ideas consider:

a. What makes your product and service special and stand out from your competitors and partners?

b. How could you package your services and products differently?

c. Which personal qualities will you demonstrate when you relate to your customers?

d. What will the service experience be like for the customer?

e. What is the biggest challenge facing your customers?

f. What is the key message regarding your brand, image and reputation?

g. How then will we develop our knowledge to meet these aims and goals?

4. Loyalty comes from long-term collaboration and excellent rapport.

This includes viewing people as partners rather than opposite parties. Consequently, managers should encourage retention and avoid loss of customers (churn) as a primary objective. Avoid spending all your energies on seeking out new contacts and

expanding market share.

5. Focus your efforts on improving your relationship with your current customers by better connection, interaction and honesty.

6. Be thankful for loyalty and do not take it for granted. You need to understand how your service is perceived and then make it your passion to discover more about your customers. Use a healthy mix of face-to-face conversations, phone and digital technology interfaces to keep interest and loyalty. Remember the frequency of meaningful contact with your customers equates to higher loyalty and improved competitive intelligence. In some cases a simple e-mail once a month may be sufficient, while on other occasions sitting down and having a chat would be better for the more valuable customers. I know of a local sandwich shop near my home whose owners organized a Christmas harbour cruise for its customers. No doubt they got plenty of return business the following year.

7. In all levels of service you must connect with people’s hearts as well as their minds. Personalizing your service and making people feel important is a must here. So using their name, recalling your last conversation or simply smiling can produce wonders. See recovery in service as a wonderful opportunity to improve relationships beyond current levels. Business needs to understand that all people have legitimate concerns and frustrations. How well we respond will indicate whether we will maintain the relationship or lose it. By showing a little more interest and giving personal treatment you will increase the chances of your customer not being swayed to go elsewhere. Ongoing loyalty is based on a strong emotional connection.

8. Show and feel empathy with the customers; understand their concerns from all perspectives. See service as an opportunity to build win–win relationships. Seek out those products and services that can dramatically improve customer value. Avoid spending resources on ‘squeaky wheels’ which customers are not happy about but are willing to put up with. The most important goal here is to determine whether you have met the customers’ expectations and acted on their feedback. Questions you may need to explore include:

a. Does your customer have a voice on how you can improve your services and products?

b. Did your business explain all the relevant information?

c. Did your business listen and understand the customer’s needs?

d. Is there an adequate follow-up, support and assistance to your customers?

e. Does the customer know why you value their patronage?

Strengthening your capability further

Increasing customer loyalty requires excellent planning and a healthy exchange of ideas to ensure the right behaviours and knowledge are applied and used. To do this requires building your capabilities to ensure you make it easier for people to be your customers. First, be able to avoid confusion and frustration; second, ask probing questions and, finally, build a flexible customer relationship management system. Let us now explore these three areas.

Avoid confusion and frustration Keep your messages crystal clear, simple and user friendly. Build on the strengths of

the past as well as making tangible promises for the future. Be ready to provide adequate training, back-up technological support and staffing to help the cause.

Do not overload your customers with a confusing array of rewards and incentives. Learn why new labels and brands sway your customers to or away from the product/service. Position your service narrowly rather than trying to offer everything to everybody.

When people ask for help make it easy for them. Give people clear choices. A little common respect can help enormously. If they are kept waiting, let them know how long they can expect to be waiting. Give them the option of speaking to a human being as soon as possible or guide them to a well-kept and updated Internet site. Consider purchasing PBX or web-based capabilities that enable customer details to pop up when they ring in.

Deliver the promise on time, on budget and within the specifications outlined, while being open to supplying a few extra positives along the way. Offer creative solutions to help their understanding of products and services. At SAP they provide opportunities for customers to join a number of business communities at their web site. Amazon has a skilful tracking system to constantly assist buying decisions, track progress distribution and repersonalize what the user sees, based on past usage. Dell Computers on their web site provides customer assistance on how to manage computer configurations.

Asking probing questions

If you wish to increase customer loyalty, you need to critically review existing relationships and find better ways of creating value. Here are a number of important questions you may wish to explore:

Who are your top customer groups or clients?

What is the strength of the existing relationship and what can be done to improve it?

How can you use existing products and services differently?

What knowledge about your customers are you retaining and not using?

Through asking these questions you can get a deeper understanding of the idiosyncrasies and needs of your customers. In particular you are able to mine out important issues relating to the quality and personality of sales transactions or after-sales customer service. At the most basic level, each business must scan and know its marketplace. From there you can begin to vary your products and services, and build new relationships for the future, ultimately leading to a partnership where both the business and the customer can get help and assistance before it is too late.

As an example look at these three business cases where thinking a little differently helped customer value, service and loyalty:

Chase improved the quality of customer service by drawing on the experience of their relationship managers. When the bank undertook their rollout of one of their new services, they increased calls on customers and product sales by more than 25 per cent, leading to an improvement of 15 per cent of the bank’s incremental revenues and 40 per cent of its incremental cost reductions.

Lend Lease Corporation, after better understanding their customer relationships, shifted their core business from building contracting to one involving funds and project management, giving higher profitability and a different service to the customer.

P & O, whose core business was cruise liners, are now a market leader in contract cleaning and catering. In this case, a little lateral thinking about their knowledge and capability worked wonders for expanding business potential to a new customer base.

Establishing a customer relationship management system

One of the hottest technological growth areas in increasing customer loyalty is the creation of digital customer relationship management (CRM) systems. Customer relationship management is a knowledge creation system where you have instant and highly personalized information about key customers, while also having a picture of current business performance.

Historically, CRM systems have typically been for larger businesses but now they are increasingly used in smaller operations as costs fall and leasing options improve. In the profit-generated business, CRM is interested in improving customer yield and customer share, and not the mass cloning of products and services. In not-for-profit businesses the benefits could be about improving the quality of the experience, better hospital care, better advice or better home support for the elderly.

Customer relationship management systems can include a range of features, including pre-campaign analysis, marketing to target groups of customers and personalized campaigns, call centre management and education, sales force automation, product and service configuration, pricing and after-sales support. In addition, a CRM system can assist higher standards of data mining, customer learning and collaboration, as well as on-line courses and education.

These features can also be broadened to assist suppliers and other people in the web value chain. For example, CSICO like many other businesses give data on a real-time basis to its business partners every day.

As you would expect there are lots of solutions out there! Customer relationship management solutions are provided by a number of vendors, including Siebel, Goldmine,

OnyX, Oracle, PeopleSoft, Pivotal, SalesLogix and SAP.

So what does a digital CRM system deliver? In its simplicity a good CRM treats all customers with individual care and attention, recording their likes and dislikes, and helping them with better service, including resolving issues, managing sales, transactions and offering better aftersales support. Customer relationship management systems are customer centric. The best CRM systems are not those with the latest killer application or software but those that maintain a positive connection with the customer, while making employees feel important.

To reap the benefit of CRM systems there are many lessons to be learnt, one being that the initiative can easily fail if the basics are not right. A study by the Meta Group found that between 55 per cent and 75 per cent of CRM systems failed because they were too ambitious and lacked focus and back-up training. They also found that CRM systems were often poorly organized and managed, and unable to provide mission-critical knowledge on trends and behaviours on a daily basis.

As Martyn Riddle from FrontRange Solutions rightly says, if an organization has bad business practices to start with, the introduction of CRM technology without reviewing a business plan can actually speed up the problem.

As you would expect, the best CRM systems have a very close partnership between all elements of the business, providing an excellent linkage and flow of knowledge between goals, operational constraints, distribution, marketing and performance. The result is stronger product and service deployment, customer feedback, work flow and support.

For further terms in relation to customer support and digital technology see Table 12.2.

Table 12.2: Glossary --customer support and technology

Bot A software robot which creates an impression that you are dealing with a human being when a customer contacts a business by e-mail or via the web.

Cookies A technology that customizes a version of a web page based on a customer’s past interfaces with the site, for example how people navigate, what they buy and what they are asking. This helps customize their interface the next time they visit.

Data mining A process that examines behaviour, attitudes and transactional data to identify trends, patterns and relationships that can assist customer service and loyalty. For example, data mining on records of charge cards or smart card transactions can discover the relationship between age, sex and the purchase of a product or service.

Data warehouse A central database that provides authorized users with access to all of its customer information. This database consolidates information from a combination of internal and external sources, and acts as a clearinghouse for such capabilities as data mining, forecast marketing and competitive intelligence. This helps to build a more accurate view of customers and their relationship with the business. Current vendors include Oracle and Sybase.

Intelligent agent Programs that perform tasks such as retrieving and delivering information and automating repetitive tasks, like answering routine customer enquires.

Web conversion rate A measure of the number of visitors who initiate a transaction on a web site within a particular period of time relative to the total number of visitors

who visit the web site.

Mining for higher yields

One of the more powerful technological forces in a world of improving customer value is in data mining. In its simplicity, data mining explores high volumes of customer information and identifies key insights on customers and markets, the result being improved service delivery and profitability. In saying this, data mining does not guarantee that you will get the right answers. Great care needs to be taken to ensure the right questions are asked and that you are ready to challenge some of the underlying assumptions and theories you may be exploring.

Typically data mining provides answers to well-focused questions such as:

Who are the early adapters to products?

Which customers are mostly likely to drop their current service and shop elsewhere?

What is the probability that a customer will purchase at least $200 worth of merchandise from a direct mail campaign?

Which customers are most likely to respond to a particular offer?

Which demographic is most likely to purchase the latest product or service?

No doubt, if properly chosen, such questions can have an immediate impact on customer yield, retention and return on investment. It can also directly impact the execution of marketing campaigns and help to influence buying behaviour and maintain customer loyalty, particularly if campaign strategies deliver high-value offers and propositions to the customers who will be most interested.

As you explore case studies of data mining you will soon discover organizations like Scandinavian Airlines, IBM and the Ritz Carlton Hotel which have carefully managed the interface between data mining and customer relationship over the last decade. They have become proven performers and clearly understand the notion of customer share. The Ritz Carlton Hotel has maintained a database on its high-value customers and has used it to provide personalized service. For example, let us assume a customer arrives at their Melbourne hotel. He likes to have a bowl of fresh fruit in the room on arrival and always a glass of Pinot Noir with his room service evening meal. He also likes CNN on cable television. Such precise information is recorded in the database and enables the guest’s experience to be met perfectly each time he stays in a Ritz Carlton hotel anywhere in the world.

Of course, such sophistication does not come cheaply. The logic that drives data mining can vary from complex machine learning and fuzzy logic, to the simple matching of patterns and clusters of analysis. It is worth noting that customer data can also be acquired from a variety of other external sources and third parties such as mailing houses, on-line retailers and credit card companies. They can also help provide a host of individual choices, demographics and competitive intelligence data.

Advancing your B2C web presence

Now that we have explored CRM systems and data mining, let us talk briefly about one of the emerging areas occurring in modern business, notably web enabled capabilities.

Before discussing this latest digital advance, it is useful to step back and explore the strengths of a human being when it comes to increasing customer loyalty. First, people bring to a customer interface a versatility and the high ability to interact. This is very difficult to mirror or better using technology. However, in saying this, having a person answering every enquiry can be quite expensive per contact, particularly if you wish to save time and money in handling routine enquiries on a twenty-four hour seven day cycle. Constant person-to-person contact can also lead to burnout of staff as well as a higher chance for inconsistency. Keeping people up to date with information is also a huge challenge, particularly in a high-growth or rapidly changing consumer market.

As a result, deploying B2C web technology is seen as a way of reaping the benefits of human touch by supplementing people contact with very interactive, fast and less error-prone digital support. As can be seen in Internet banking, the transaction price for the customer is cheaper and they can do transactions in their own time. It is expected that as connectivity and bandwidth improve we will begin to see more three-dimensional, e-learning and virtual shopping as a regular feature on the Internet.

Bryan Bergeron in his book, The Eternal E-Customer , discusses the emergence of what he calls emotional intelligent interfaces (EII). Here customer e-mail and web-based enquiries are answered by a software robot with empathy and emotional connection. The result is that the customer is under the impression that they have been dealing with a human when, in fact, it is a computer surrogate. In the past this capability has largely been unsuccessful. For example in 1995 Microsoft launched an emotional interface called BOB. The BOB system was used to respond to customer enquiries by e-mail and chat in a somewhat emotional and empathetic way. However, most people found the persona of BOB somewhat condescending, patronizing and insulting. Since then there have been many advances particularly in the more routine conversations using natural voice recognition. In more recent times the Australian Racing Authority (TAB in Queensland) has been using natural language speech recognition technology for placing bets on races. It is claimed that in excess of 95 per cent fewer calls need to be passed on to human operators.

It will be interesting to see how this field develops in the future. No doubt it is both exciting and somewhat controversial. I know that when I recently called for a taxi I was dismayed to have to talk to a computer, but the system worked perfectly.

Taking an enlightened stand

There is a huge flip side to the whole debate on technology and the drive towards customer loyalty. The fact is that many customers lose out where a business is only interested in the crème de la crème of the marketplace. Commercial realities often dictate that only a select few customers are given preferential treatment. In many cases businesses are happy to have unsatisfied customers and still make huge profits. Make no mistake current advances can discriminate against the least valuable customers unless a stand is taken on the grounds of moral responsibility or social compassion.

James Rosenfield, in an article entitled ‘Customer focus-pocus ’, says that in many cases customers are being plundered, manipulated and encouraged to move on. He also says that there is no evidence that good customer service and customer satisfaction leads to profitability. The fact is there is a lot of evidence to show that the opposite is true. This conclusion is supported by a Baum et al. study that found high performance in technology and customer satisfaction does not necessarily translate into higher profitability.

Given this evidence it is not surprising that there is a ground swell of public opinion screaming for a much better deal for customers. International groups such as J18 and movements against corporate greed and fair trade are a few examples of such lobby groups. It is early days yet, but there are some examples of businesses taking a more responsible stand, such as banks offering more choices for lower-income earners.

In the next decade moral, ethical and social issues will become vitally important in growing customer loyalty and succeeding in all forms of business. If the purpose of your business is solely profits, you will need to take a radically different approach and incorporate a more compassionate and caring community-focused perspective if you are going to grow competitive advantage in the long term.

It is not for me to say how to live your life or run your business, that choice is yours. However, I do think that the tension between improving customer loyalty and business success cannot be ignored. Customer loyalty can go hand in hand with a more enlightened stand where excellence also means good ethical conduct and social responsibility.

What is making the transition difficult, particularly in the corporate world, is that senior executives are constantly being rewarded to cut costs and increase shareholder price at the expense of customer service, employee well-being and better learning.

Summary

One of the biggest drivers for improved performance and innovation is increasing customer loyalty. This is based on the value proposition that it is far more expensive to attract new customers than it is to keep your existing ones. The higher the personalization and ‘customerization’, the greater the chance your business has to improve customer retention in the modern e-business era. To help this, businesses are increasingly using CRM systems, data mining and B2C web technologies to streamline and improve exchanges with the customer. Again, knowledge and the use of it is a major leverage in how well a business grows and sustains competitive advantage. However, there are no short-term easy gains; it takes a commitment to service, ethical practice and discovery.

Chapter 13: Polishing Your Training Performance

Overview

Don’t surprise people with content, surprise them with process.

(Eric Jensen)

Polishing your training performance requires:

designing training based on the needs of the learner and the business

creating e-learning know-how

sampling and exploring new forms of digital learning

stockpiling small chunks of reusable business knowledge

combining of traditional training with new digital delivery.

Breathing life into business learning

If any business wishes to succeed, it requires a training effort and learning process that inspires imagination, discovery and performance. For training programmes to be successful it needs to address business needs as well as the aspirations and dreams of its people.

On a business level, the training effort often starts by addressing those gaps in knowledge that require immediate or urgent business attention. Shortfalls can include lack of expertise in technology, managerial systems, skills or attitudes. Training can seek to improve the quality of succession planning, career development and lifestyle by helping to address burnout, morale, relationship and/or teamwork skills.

At a personal level learners need to be convinced that there are tangible benefits in undertaking the training. For example, will the training build self-worth and inner confidence? Will the training be worth the investment of the time and effort? Will the learning be applied and useful? If any business or manager neglects any of these factors your training effort could well be wasted.

Without doubt in the modern knowledge era there are many pressures that can assist or frustrate any training effort, whether it is done on the job, in the classroom or via e-learning. If our goal is to breathe life into training we need to help people to understand the promises, doubts and vulnerabilities that come with learning. We see this most when people are stretched outside their zones of familiarity or comfort. It is in this domain where the leaps in our capabilities can be highest, but also where the greatest emotional and practical support is required. At these times we need to draw on our personal reserves and the support of others to succeed. Whether it is rethinking our strategy or just being a little kinder to one self, we need to take positive actions to overcome the impasses and struggles we face in the learning zone. In practical terms this means providing emotional and intellectual support at every opportunity.

There is often talk in training circles that learning must be fun. Well, in reality it can often be the exact opposite. We all have to be ready and willing to help each other make the transitions and learning they desire. Instead of viewing training as a purely logical process, we must encourage people to notice and respond to the moods and emotions they will face, notably, what tactics learners can use to motivate themselves when they need to learn more. Such inspiration and self-management is priceless when it comes to the development of skills and know-how. In addition, make sure there is excellent practical and emotional support to help people and teams learn smarter. Take digital learning for example, clear guidance on computer awareness, tutor availability and the right software and operating systems is essential. More traditional training can be backed up with tools, learning books and management support.

Helping a learner learn and building training performance has been a theme of many of my past books and articles, notably Learning Unlimited and Creating Training Miracles, the latter of which I wrote with my colleague Kevin Lohan. Without revisiting the content of those books take note of the following seven key design elements to successful training. Apply these principles in all your training efforts and you will have more success, whether training face to face, coaching on the job and/or designing e-learning.

Seven design elements of successful training 1. Give your training or learning an exciting name that grabs attention.

2. Start your training by: 1. (a) explaining why the learning is important to the learner and to the business

2. (b) sharing a real-life story that demonstrates the reality of the benefit

3. (c) painting the big picture to show how the training fits in with other responsibilities.

3. Stimulate curiosity and thirst for learning by creating plenty of chances to apply and practise what is being discovered.

4. Highlight relevant stories, examples and simple frameworks to aid recall and application.

5. Review and celebrate to the maximum.

6. When the training has been completed do not leave things to chance, make sure there is adequate coaching and tools to assist and reinforce new skills on the job.

7. Evaluate and improve the process for next time.

Surrounding the whole conversation of breathing life into the learning process is the assumption that for training to work it must consider and adapt to the unique learning styles of the people involved. Again the topic of learning style has been a major theme of my previous books and I do not intend to revisit those theories on this occasion. To help you explore learning theories you may wish to visit http://tip.psychology.org/ or www.patsula.com/usefo/webbasedlearning/.

When it comes to discovering learning theory and styles I have found the work by David Kolb, Peter Honey, Alan Mumford and Ned Herrmann most relevant and useful. Other related fields you might wish to explore include instructional design, neuro-linguistic programming, competency-based training and, of course, web design.

Helping the e-learner

As has been highlighted, learning via the web and other digital means has given people more ways to acquire knowledge and capability on a round-the-clock basis. Whether it is doing an on-line course, participating in a web broadcast, on-line chat, linking into a company e-library or watching a CD-ROM, the choices and avenues are continually expanding. The result is good news for learners and the business because employees, customers, partners or suppliers have a much greater chance of keeping up to date and fully trained.

The reality is that digital learning or e-learning is no different to any other form of learning. It needs to be well organized and structured to succeed. It requires careful thought and planning about the business needs, audience, delivery, content and evaluation. As has been previously pointed out, the delivery of information to a person’s computer or palmtop should not be confused with learning. Just because someone has access to the latest e-learning package does not necessarily mean they will find the time or be motivated enough to undertake what is required. Within these broad headings you will also need to consider issues such as the choice of technology and navigational strategies.

Is the knowledge relevant or useful anyway? In many ways digital learning comes with a much higher level of self-management and responsibility than has existed in the past. So, before any business can become too carried away about advances in training using digital technology, make sure that it addresses the needs of people and that digital learning is the best method for your business. Only then will we begin to see a large-scale revolution in training performance.

A well designed e-learning lesson can stimulate the senses by making the training experience interactive and relevant as well as engaging and entertaining. Done properly the benefits can be astounding. At KPMG they calculated that to train 22 000 employees by traditional face-to-face means on e-business fundamentals it would take years to complete. However, by investing US$3 million in e-learning, they could train 8000 employees in eight weeks. Counterbalancing this outstanding result is a clear industry observation that many e-learning initiatives fail to meet business expectations. Common reasons include being too preoccupied with rolling out content and being fooled by outrageous expectations of saving costs and return on investment. In fact a 2002 UK study by THINQ indicated that 65 per cent of companies are not making use of e-learning to fulfil internal training requirements. In smaller companies the figure of noninvolvement was much larger, at 78 per cent. This study summarized a common perception that people felt, that on-line learning is a stand-alone addition to traditional training, when, in reality, it needed to be integrated into an overall learning approach to the business.

As you would expect, changing from a more traditional form of learning to e-learning will generate resistance from some people. They still prefer the old model of on-the-job learning and attending live classes. Alternatively, there will be people who wonder what all the fuss is about and will jump straight in. Also you might find that the resistance does not come from the learners alone but from the trainers or designers themselves. A likely example could be trainer who loves to present face to face and loathes to get involved in web design technology. If your business wishes to move along the road to more e-learning, it is quite likely that you will need to bring together an array of new talent to steer training in a new direction, with web designers and qualified e-learning professionals being

part of the team effort.

In large and medium-sized businesses, functions such as human resources, training and IT may need to reinvent themselves and let go of outdated thinking before a business can reap the benefits of digital learning. So, be wary of classic delaying and avoidance tactics like stalling, not taking the matter seriously and/or putting in a token effort. Encourage people to do a demonstration as soon as possible. You should not be seeking perfection, just a solid start. Aim to build confidence and expertise and to achieve early success.

The fact is that, like traditional training, digital learning is only limited by your creativity. Whether creating checklists, writing stories or holding one-on-one coaching sessions, there is a wonderful opportunity to thread higher levels of competency and thinking into what a person may experience through digital technology. In many cases a bells and whistles approach may be too much and simple graphics and text would be sufficient.

To help you build the case for business digital learning here is a series of questions to consider. You may also wish to review Table 13.1, a short glossary on some of the current terms.

Table 13.1: Digital learning--glossary

It is worth noting that the terms ‘on-line learning’, ‘e-learning’ and ‘digital learning’ are often used interchangeably in the literature and industry commentary. We need to be sure to check the context and nature of technology when you hear or read these terms.

General terms

Asynchronous learning An e-learning event which does not require participation of people at the same moment in time. For example, voice mail, e-mail, file sharing, threaded discussions and interactive voting.

Blended learning Training programmes that combine technology-delivered learning with traditional methods such as face-to-face instructor-led classes. It could also include combining e-learning with other approaches such as knowledge-sharing fairs, open space, mentoring and reading books.

Blog (weblog) A blog consists of regular journal-like entries posted on a web page for public viewing. Blogs usually contain links to other web sites along with the thoughts, comments of the host.

Content management system (CMS) Software application that streamlines the process of designing, testing, approving and posting content on web pages.

HTML This provides the code to enable browsers across platforms to display text, graphics and create links between web pages and links within pages. It provides the instructions to enable browsers such as Internet Explorer and Navigator to operate.

JavaScript A programming language that allows authors to create more stimulating, effective and interactive web pages. Examples include roll-overs and pop-up menus.

Learning content management system (LCMS) A software application that allows trainers

and training directors to manage both the administrative and content-related functions of training. An LCMS combines the course management capabilities of an LMS (learning management system) with the content creation and storage capabilities of a

Building a business case for digital learning

CMS (content management system).

Learning management system (LMS) Software that automates the administration of training events. The LMS registers users, tracks courses in a catalogue and records data from learners. It also provides reports to management. An LMS is typically designed to handle courses by multiple publishers and providers. It usually does not include its own authoring capabilities; instead, it focuses on managing courses created by a variety of other sources.

Learning object Forms the basis of e-curriculum design. It is the smallest chunk of information that can stand alone with meaning. Think of a web page as a learning object. Other terms used here include educational objects, content objects and nuggets.

Synchronous learning Needs to be undertaken in real time with others, to ensure immediate two-way communication. It includes holding meetings by video or audio conferencing, using web cam or conducting live chats on a web site (that is, the opposite to asynchronous learning).

Threaded discussion A series of related e-messages on a given subject, including the original message and subsequent replies. It enables a focused discussion on an issue or topic. Often used in e-learning and virtual teams in the forms of discussion groups.

Virtual classroom Delivery of scheduled learning at multiple classrooms via networked solution at the same time.

XML Allows you to describe data and its structure. It works with HTML to assist tagging and linking of information and data. XML is now firmly established as the preferred option for digital learning because it aids advanced searching and find capabilities.

Active Server Pages (ASP) One of the most popular Microsoft applications for creating a dynamic web site and enhancing interactivity. Typically you will need some knowledge of HTML and SQL to benefit, as well as a Microsoft operating system.

Cold fusion Creates a data-driven web site. Cold fusion could be used to drive an ezine (electronic newsletter) service. Again you will need some knowledge of programming languages to benefit. Other products that perform this service are Dreamweaver and Ultra Dev.

Common gateway interface (CGI) Sets the rules on how a web server talks to a program. Used for guest books, hit counters, shopping carts, filling out forms and message boards to operate.

Java Server Pages (JSP) Another means by which to create dynamic web sites. JSP uses Java. (Java is one of the most popular web programming languages.) Java and JSP will run on almost all major operating systems.

Web page applications

Current software products that can aid e-learning and web page design include: Dreamweaver, Microsoft FrontPage, Fireworks, Flash and Microsoft PowerPoint.

Kick starting

Which hot business issues could be used to showcase digital learning?

Which learners are technologically prepared?

Do you have senior management backing?

Which pressures exist that are making the commitment difficult?

Do you have a champion of the cause?

Is the message of, ‘Why digital learning’ getting out there?

Do people have the knowledge, funding and equipment to undertake such a commitment?

Building momentum

Are you supplementing the digital push with other sources of inspiration like newsletters, e-mail reminders, demonstrations and fliers?

Do managers, mentors, coaches and trainers encourage change on the job?

Do you produce evidence that indicates which parts of the business are exploring and/or using the new technology?

Are people getting an opportunity to put into practice what they are learning?

Generating value

Is the usage and application of new technologies noted, rewarded and acknowledged?

Is the learning being attached to digital learning seen as meaningful for both the individual and business?

Is there a clear linkage between what is being learnt and the needs of the individual and business?

Are you capturing stories of how the new approach is helping new connections, improving know-how and helping the business?

How do you propose to track future activity, contribution and usage?

Are people giving and receiving feedback on how the process could be improved?

Exploring e-learning courses on the web

Launching yourself into the world of e-learning courses by the web can be both an exciting and daunting task. Here are a few tips to help you get started in this emerging area. The focus here is on getting the most value out of courses on the web. Collaborative and other forms of technology have already been discussed in Chapters 11 and 12.

1. Get a quick feel of what is on the web, look at the following sites.

These were recommended by Tony Whittingham, lecturer in an elearning class at the University of Technology in Sydney: (a) http://www.aquinas.edu/homepages/millemar/AT161 (b) http://iris.nyit.edu/~tdiener/index.html (c) http://home.sprintmail.com/~debflanagan/main.html (d) http://www.actden.com/pp (e) http://cbae.nmsu.edu/~dboje/sbc/pages/page3.html (f) http://www.openday.uts.edu.au/tour.html

2. If you have a topic of interest start with a search of the World Wide

Web and see what is currently listed. A good practice is to see some free samples or live demonstrations before you take the decision to proceed. This will give you a look and feel of what the quality is and the software and hardware you will need. You can also evaluate the product and service before you start. Here are some samples of on-line e-learning course providers: (a) American Media Inc. – www.amitraining.com/demos/channel (b) Barnes and Noble – http://www.barnesandnobleuniversity.com (c) Click to learn – http://Click2learn.com (d) Digital Think – www.digitalthink.com/catalog/ (e) TAFE New South Wales On-line – www.tafeplus.com/ (f) University of Southern Queensland – www.usqonline.com.au

3. When choosing which web course is best for you there are a list of criteria you should consider, including cost, length of training, structure, interactivity and flexibility. You will also need to check the software and hardware requirements, back-up support, instructor expertise, trainer availability, feedback on learning undertaken and guarantee.

4. If you decide to undertake e-learning, discuss your schedule with your manager, co-workers, partner or family. Discuss your commitment and what support you may require. For example, if you are using work facilities, having some quiet time on the job will help. Also you will need to be considerate of your workers, particularly if there is a video or audio component. It is helpful to commit to a routine to do your e-learning, whether it is first thing in the morning or later in the day. Choose whatever works for you and your schedule. If your elearning is in the form of direct performance support, such as an on-line help desk, explore a little about the background and intention of the system before you start. This will help you to gain the most value out of the support you are receiving.

5. If you are a novice, find a buddy who can help you with some of the technical aspects of e-learning. Whether it is a course provider, your IT contact or web designer. They should be able to help you navigate around the system and support you with any extra software or plug-ins you may need.

6. See this new form of learning as an exciting new way to make connections and

friends. Take the opportunity to chat with other learners either face to face, at peer learning sessions or as part of a discussion group on the net. Be the initiator; passively waiting for the answer will not help you. Be assertive and explore the unknown while being respectful of the time and energy of others. The eventual success you have will be based on the quality of the interaction, debate and sharing, not the technology.

7. Set realistic goals and do not overburden yourself. Find a healthy balance between work, leisure and learning. Do your e-learning in manageable chunks, twenty-minute sessions are a good start. If you are finding the leap to web-based learning too much, consider doing a course at an evening college on surfing the Internet before starting e-learning. You will find that better e-learning providers and hosts will give you an introduction into the functions and applications of elearning before you start your course. Take advantage of these resources. 8 Make sure you review what you are learning. Keep a learning journal and build on your own personal archive as you proceed. Finally, celebrate along the way whether it is buying yourself a cappuccino or sharing what you have learnt with others. If you find the course lacks entertainment and quality, let the course provider know. Feedback is essential if the world of e-learning is to improve. A good design should be much more than e-reading; it should be interactive, enjoyable and relevant.

Fundamentals of modern curriculum design

A good e-curriculum is much more than just dumping people with text and nice pictures. It provides highly efficient and customized grabs of instruction. An excellent e-curriculum is rich in learner-focused material and, irrespective of whether the instruction is delivered by high bandwidth or a telephone line, the learner should receive relevant and attention-grabbing content which helps take them on a knowledge enhancing journey.

To understand how this is done it is important to grasp how digital training design has fundamentally changed into a learning object proach. Using advances in XML authoring language and agreed industry standards, modern digital training is designed around small pieces of two- to fifteen-minute instruction. Each piece of instruction is independent, reusable and linked to carefully designed searching and find capacities. This learning object strategy helps move the e-design from large inflexible masses of information and instruction to one that is easily revised, searched for and modified. In addition, the learning objects will easily integrate into most forms of digital technology delivery, whether it is a web page, an instant message on a mobile phone or a CD-ROM.

Training is no longer created just as courses. As Elliott Massie, a leading authority in e-learning says that technology-delivered training is now assembled, not authored from large reservoirs of content presented to the learner. More emphasis will be placed on building knowledge bases that can be published quickly.

The consequences of this learning object approach to winning the knowledge game is profound. For the learner this approach helps consistency and personalization. The business will be able to develop a structured approach that can easily be adapted to different needs, media and learners. Smartforce, a leading worldwide training provider, claims to have over 20 000 learning objects on a cavalcade of topics for business.

Driving much of the industry reform in learning objects is SCORM. SCORM is an initiative of the Advanced Distributed Learning Network, and stands for Shareable Content Objects Reference Model. Simply put, SCORM is a collection of standards and specifications that sets the foundation for better unity in design, assessment and profiling of digital learning. For more information about SCORM visit http:// www.scorm.tamucc.edu/ and www.adlnet.org

When you think of digital learning, think of small chunks of information or instruction. The emergence of learning objects not only impacts digital learning, it will also in the future shape how face-to-face training or on-the-job coaching might occur as managers search out and include learning objects in their lesson plans. So start, if you have not done so already, to look at your current archives of resources and learning to see how you can stockpile a collection of your knowledge for future use. In this regard one of my clients in local government is currently creating an archive of over 1200 learning objects to assist a service initiative. The goal is to create a web presence that will provide twenty-four hour seven days a week service, help and training.

In the area of designing learning objects it would normally entail various elements. These include a short overview, a series of instructional pieces, assessment and summary. The design should encompass a series of interconnected training and assessment processes. The type of learner assessment will depend on how the learner is progressing and the type of material. For example, dealing with concrete facts and procedures or

developing capabilities in concepts and processes will require different design elements.

One field of knowledge that will help the growth of learning objects is competency-based training. During the past two decades many industry and government bodies have thousands of skills standards, ranging from pastry cooking for chefs to risk management for managers. So do not reinvent the wheel. See what public information you can acquire or purchase. However, be wary of thinking that e-learning is all about buying content. You need to back it up with the right business case, design and system.

With regard to authoring or designing, it is also important to recognize that not everyone will have the skills and motivation you need. For example, a content expert may be well versed on what needs to be taught but may not have either the time or motivation to do the design. Normally an experienced e-learning designer best performs e-curriculum. This will release the subject-matter expert to be more directly involved in other roles such as sponsorship, mentoring and collaboration.

Here again you will need a team effort to succeed. The final design can only be decided upon after holding conversations with business managers, customers, decision-makers and vendors. Only then will you have a clearer picture of the content and system design you require. Such conversations do not end at the design phase but continue well into the implementation and beyond. Who does all this work will depend on your capability, time and desire, meaning it could be a combination of an external vendor, responsible course provider or your business web designer.

Having some grasp of how modern curriculum design applies to your business, your attention needs to shift to how a digital training system is co-ordinated. Normally all of the learning objects you have created are placed in a manifest computer file which is then managed by an LMS. Depending on your budget your business could build your own LMS or have it provided by a third party. For most small to medium-sized businesses, the third party option is the only realistic one. Before jumping in and acquiring or building an LMS, be careful to ensure common mistakes are not made. First, the LMS must fit your business culture, IT set-up and technology. Make sure you clarify your intentions and expectations. Ensure there is a plan including clear links to your business plan. Second, do not go for the cheapest but for the one that offers the most value, as there is often a huge difference. Make sure that the LMS is SCORM compliant and scalable. Ask for demonstrations on how vendors and providers are meeting this standard. Finally, do some reference checks with past clients to ensure your vendor is a proven performer. The best way to do this is to find a similar style or sized business to benchmark potential suitability with your operation.

Blending your overall approach

In exploring the field of training one guiding principle seems to shine out. No single solution is perfect. You will need a combination of different traditional and digital strategies if you want to improve your levels of performance and knowledge.

In the modern knowledge era, digital learning is providing more sophisticated ways for people to share and learn together. However, digital technology only works when supported by outstanding design, technical back-up and human support. As highlighted in several industry studies, the digital learning revolution has hardly begun. Statistics on the number of people who are currently undertaking e-learning shows this to be still well under 10 per cent. The vast majority of those connected to the Internet are opting for e-mail, chat lines and information retrieval rather than choosing web courses and collaboration capabilities. As you can see, it is still early days.

Conversely, if a business feels they can survive purely on the merits of technology they will struggle to gain competitive advantage. The Massie Center in the USA conducted a survey of 2119 people from all over the globe. Eighty-eight per cent of learners and 91 per cent of managers wanted a trainer assigned to their e-learning experience. Sixty-two per cent of learners and 63 per cent of managers would be more likely to select an e-learning class if a trainer were part of the package, either via e-mail or threaded discussion. Simply put, people want skilled human beings to answer questions and provide emotional support, not just the technology.

In saying this, accept that a blended approach is most likely more expensive and you may well lose some of your cost savings from rolling out digital technology. However, a well-co-ordinated and blended approach will pay off with greater learning and business improvement in the long run. As the director of TPI, Ronnie Stronge, says, our challenge is how to bring all the elements together in the best combination.

Finally, look for short bursts of stimulating and relevant training. Short duration face-to-face classes and interesting discussions combined with pre-class and post-class learning guides is a more common model now being deployed in better practice case studies. Most important of all, seek to create a spirit of buzz in the learning with a host of different ways to stimulate interest and collaboration. Here again the sky is the limit, whether it is creating a competition, working on a joint puzzle on the Internet or designing a knowledge sharing experience, extract whatever it takes to polish your training performance.

Summary

In modern business, training must be increasingly clever in stimulating curiosity, buy-in and application. You need to surprise and to excite people with a healthy mix of digital delivery and traditional face-to-face training. We must not confuse access with learning. Polished training combines delivery with outstanding support and assessment. For some the transition to e-learning is easy, while for others it could be highly stressful and unsettling. As a result an e-curriculum needs a design that is based on excellent consultation with business managers, customers and subject-matter experts, while also understanding human emotion, desire and willpower. One major influence on modern training is learning objects. Learning objects are small chunks of reusable and replaceable pieces of know-how that form the basis of most modern digital learning. Here again the best results only come with an integrated approach combining clear business needs with well-chosen training and support. Only then will the benefits of growing competitive advantage be realized.

Part Three: Ensuring Lasting Success Chapter List

Chapter 14: Evaluating Your Results

Chapter 15: Measuring Your Know-How

Chapter 16: Passing the Final Test

Having invested so much time, effort and resources to open hearts and minds and to grow your competitive advantage, it is imperative that you back this up with the right formula of evaluation, measurement and review.

To do this each business and its people must examine the quality and performance of its knowledge. This ongoing enquiry will include a number of important reviews: first, are your existing approaches having the desired impact for your business, customers and society? Second, is your capability and know-how adapting to business changes you are facing? Finally, are your people taking the steps required to reinvent their thinking and awareness for the future?

Having studied and learnt from these questions you will then be well placed to win the knowledge game.

Chapter 14: Evaluating Your Results

Overview

The purpose of evaluation is not to do it, or to get it done; it is to use evaluation to serve some larger goal.

(Robert Brinkerhoff)

Evaluating your results requires:

serious commitment to review

motivated inquiry and study

higher standards of business governance

measuring more than just dollars and economic return

exploring the real impact of business learning.

Treating measurement as your best friend

There is little point spending hours trying to win the knowledge game if you do not evaluate your efforts. This is a glaring weakness in current business strategy in all industries and countries across the world. The fact is that managers rarely take evaluation seriously or invest their time in it.

This observation has been consistently backed up by industry studies for several decades. The American Society for Training and Development again highlighted this conclusion in the 2002 State of the Industry Report with only 6 per cent of businesses surveyed evaluating the business impact of their learning and training initiatives.

If only managers took a little more effort to evaluate and measure the impact of their investment in learning, businesses would be much better placed to capitalize on their strengths as well as address their weaknesses in winning the knowledge game.

The good news is that the theme and importance of evaluation has been with us as we have travelled through this book. For example back in Chapter 1 we initially discussed the importance of each business knowing the gaps between its vision for knowledge and how it is actually performing. Then we discussed the importance of review in faster deeper learning in Chapter 4, while in Chapter 6, we noted how, by measuring productivity, increased talent retention and higher levels of customer value, managers will have a better measure of how they are tracking.

Of course, the discussions of evaluation and measurement did not end there! In Chapter10 we introduced the business imperative of calculating and listing your proprietary knowledge and intellectual capital in financial records. Then, as we shifted our attention to leveraging digital technology, customer loyalty and e-learning, the importance of critical review and evaluation were also addressed.

This observation of the recurring theme of evaluation should not be of any real surprise! Evaluation is about continuous improvement, knowledge enhancement and learning. It has the potential to be a trusted friend for life, if you only give it a chance. It is the cornerstone of personal and business growth. If you are serious about making a difference and achieving your goals, you must make a commitment to review and audit your commitment and success in innovation, learning and knowledge enhancement.

Not all measurement and evaluation is good. In fact, if you are not careful, what you produce can be inappropriate, meaningless or inaccurate. Just because you are getting great scores, great numbers on a balance sheet or you feel good does not necessarily mean you are discovering what you need to know. You have to have a discipline that stretches your boundaries of the known and unknown to reveal the truth.

Excellent evaluation must be backed up with careful planning, transparency and consultation. Management must be prepared to deploy a range of measures without being guilty of producing bad or misleading information. Deploying the right spirit is vitally important. Treat the process of evaluation seriously and you will discover the insights you need to help provide the services and products you desire in a smarter, faster and better way.

To help you get the best out of evaluation of knowledge, learning and innovation, here are

five tips to help steer you on the right course:

1. Avoid measuring everything. Spend your evaluation efforts on the big projects or mission-critical business processes. Carefully isolate the data and measures that will give you the best and most accurate picture of the truth. These could include performance measures as well as contributing factors such as customer expectations, work environment and the level of management support. Wasting time on trivial matters and ‘squeaky wheels’ is a serious waste of your resources.

2. Be wary of accepting benchmarks or standards from other businesses without first studying their suitability and relevance. Just because someone else has reached a certain standard does not mean it is achievable or relevant in your business. Consider the constraints and idiosyncrasies of your business. Make sure you are clear on what you are trying to do and measure.

3. You need to be clear on your real needs and hot spots. Do your homework before venturing elsewhere to find the answer. Make friends with financial and industry experts who can help you argue a business case based on facts and the right evidence. Then be prepared to back up your discoveries with testimonials, unsolicited kudos or stories that help build your picture of success, progress or failure.

4. Dig below the surface and question assumptions, beliefs and taboos. Be prepared to ask different questions to map out the next practical step. Your evaluation may tell you how you are going, but it may not tell you what to do next. Ask only those evaluation questions that you are prepared to answer yourself. Encourage the sharing of important knowledge and unbiased feedback. Be ethical and preserve confidentiality and trust.

5. Review how well you are conducting the evaluation process itself. Explore how successful you have been in communicating the intention and purpose of your study or review. Remember the process of measurement must sound both interesting and important, otherwise people will not help you out.

Raising the level of expertise

When a business is evaluating well, it is more likely to discover the value of its wisdom and capability. Each part of a business must be vigilant in discovering new avenues for improving excellence and expertise. Special efforts must be made to seek smarter ways of learning and achieving results. Whether team learning or studying the merits of a system, the cycle of continuous improvement never stops.

As you would expect, there are many frameworks, methods and formulas that have been produced to help evaluation, measurement and review. However, all this assistance is useless, unless people are either motivated or have the time to undertake such an enquiry. So, before being hooked on the techniques and methods, it may be very worthwhile to ask: ‘Are we serious and motivated about undertaking evaluation? If not, let us talk about why and what can be done to improve it?’ From there you are much better prepared to move forward and take the action required.

For me, one of the great revelations that comes from winning the knowledge game is that worthwhile or interesting discoveries can often be made without too much effort. Within a few hours of asking a few questions or holding a team discussion you can quickly gather some ideas, intelligence or feedback. It is not as complex as some people would think. If you find people are paralysed by the fear that evaluation is some huge task, break it into small chunks and enjoy the early success. This will help people to make a start and, hopefully, see the benefit of evaluation more quickly. It may also unravel any motivation or avoidance problems that may exist.

For example, in preparing for this book, I undertook a brief half-day study to explore what it takes to be a star performer in modern business. Within a few hours of searching the Internet and asking colleagues I found two insights that helped broaden my perspective. Such short bursts of inspiration are key to winning the knowledge game and helping us grow and enhance our understanding. The first insight was by Jac Fitz-enz and the other by Rosabeth Moss Kanter.

Jac Fitz-enz in his book, The ROI of Human Capital, shared the findings of the Hay Groups’ study of 100 of the most admired companies. There he listed what separated the very best from the rest. They found the better performing businesses excelled in a work environment that fostered:

teamwork

customer focus

fair treatment of employees

initiative and innovation.

The average performers were more commonly interested in minimizing risk, respecting the chain of command, supporting the boss and making the budget.

While Rosabeth Moss Kanter in her book, Evolve , listed seven qualities that she believed helped shape star performers in world-class organizations. They were the proven ability to:

Display curiosity and imagination that helps people envision and grasp new possibilities

Make oneself understood by understanding that others have not shared your life experience and as a result they will have a different worldview

Create bridges of thought and not be confined to a single perspective

Grasp complexity and make sense out of complicated multi-partner relationships

Care for and feed their teams’ bodies and spirit by being sensitive to their needs

Work with people as resources by respecting what others bring to the table and then listen to their ideas.

Lead through the power of their ideas and strength of their voices rather than any formal position or authority they may hold.

So, do not burden people with a process of evaluation and study which digs up resistance and avoidance. Identify key areas for action and make a start, and raise the level of expertise, otherwise serious evaluation will remain in the ‘too hard’ basket for a long time to come.

Delivering honesty, transparency and governance

No discussion of measurement or evaluation should be undertaken without addressing the values of honesty and transparency. Without a desire to uncover unbiased and meaningful information and knowledge, it is very hard to achieve lasting success. However unpleasant the results may be at times, we need to uncover the facts to move forward.

Choosing to play it safe and not share vital insights can lead to unfortunate surprises such as unnecessary losses, a damaging downturn or a fall in know-how. This is particularly relevant to the process of business reporting and governance. To overcome the haunting prospects of business failure or destroying your reputation, evaluation of your know-how and performance requires a healthy combination of transparent recording and independent auditing.

To help you maintain a grip on how seriously you treat knowledge as part of your business, here are seven questions you may need to ponder:

Does your business see better knowledge and innovation as part of its future?

Does the business practice, encourage and reward people for sharing knowledge?

Are your systems and processes helping people to collate and disseminate what is being learnt?

Does the business protect intellectual property while also nurturing talent? How regularly do you learn from your mistakes, risks and successes? Is the knowledge being gained benefiting your customers, partners and society?

What guarantees are there that both evaluation and business governance is transparent, open and truthful?

Whether it is the honesty in financial recording, or the quality of evaluation, there is an increasing expectation that all businesses could perform better. Needless to say, the fall out from Enron and World.Com and HIH has added impetus to this cause in recent years. In this regard there have been many efforts across the world to help raise the standard of reporting and disclosure.

One such initiative is that of the Institute of Social and Ethical Account-Ability, at www.AccountAbility.org.uk. Here businesses are provided a series of frameworks (for example, AA1000 and AA2000) to help them improve their accounting, audits and reporting by being more socially and ethically responsive. In this regard a very high value is placed on accuracy and truthfulness.

For the record, the specific behaviours that are included in the draft AA2000 framework include:

developing leading-edge practice in organizational learning and innovation

creating effective methods for communicating results and progress

implementing management systems that monitor and learn from business activity and the conversations with stakeholders such as employees, customers and the

community

achieving increased public trust, respect and co-operation through transparent reporting and assurance

creating a governance process that helps to manage risk for optimal performance.

No doubt the benefit of implementing such action has a profound impact on how a business succeeds through knowledge, that is, with the utmost social responsibility, ethical behaviour and integrity. It also provides a catalyst for a cycle of innovation based on partnership with the stakeholders and the community at large, and increases the chances that what a business reports or claims can be believed.

Businesses that have incorporated this thinking into their evaluation include British Airways, CEMIG (Brazil, power generation), Ford Motor Company, IBM, KPMG, London International Festival of Theatre, Novo Group (Denmark, health care and industrial enzymes), Tesco and Verizon.

Living on the triple bottom line

In modern business achieving an outstanding profit result is not enough. Society, communities and governments are now expecting an outstanding reputation in other areas as well. A modern business must be a champion on several fronts. First, it must be a consistent performer with outstanding service and product delivery. Second, it should be deploying sound and truthful reporting that helps ensure it is adding value in both financial and non-financial terms. Finally, it should have systems in place which help guarantee that it can sustain itself and add value to society.

One such demand is that business be socially and ethically responsible. As was discussed in Chapter 3, managers and their businesses must bypass their ego, and the attraction of higher wealth, to build a worthwhile purpose. One example is John Huntsman who has built the US$5 billion, 10 000-employee strong, Huntsman Chemical Corporation. Their mission has moved from what could have been labelled a pure profit motive to one that is quite different. Their current mission includes the following messages: paying off the debt, being a responsible corporate citizen and, finally, relieving human suffering. In recent years the business has been actively involved in many causes which some would argue is not core business. These include donating US$100 million to a cancer centre and building a shelter for the homeless in Armenia after an earthquake. John Huntsman strongly argues that this investment has been worth every cent. Not only is such action going to important causes, it creates a much greater spirit of accomplishment, motivation, unity and teamwork in the business itself.

Whether it is a small business giving money to a local child-care facility or a local artist donating a piece of artwork to a charity, there are many ways we can each make a positive contribution. The goal here is not about being seen to be nice to people, it is about making a worthwhile and positive impact on society, the ecology and the planet. With this focus the impetus for ensuring lasting success takes on a much higher level of importance and intention.

One way of pointing a business on this path is to embrace the triple bottom line. One of the best resources for exploring the triple bottom line on a world scale has been the Global Reporting Initiative at www.globalreporting.org. Here intensive collaboration and co-operation between authorities and experts from the UK, India, Canada, Japan, the USA and Sweden have produced a range of measures for economic, environmental and social performance.

The result has been a voluntary code on how any business or organization can take action. The Global Reporting Initiative has been very careful in making practical recommendations as to how all businesses can respond on a flexible and voluntary basis. For example, there is a phased incremental implementation for smaller businesses. The simple structure provides an easy to maintain process that can be updated and disseminated.

The various indicators that could be listed under a triple bottom line framework include:

Economic: profitability, productivity, faster research and development, reduced cycle time, high-quality decision-making, lower training and education costs, agile manufacturing processes, faster customer response, increased rate of innovation, reduced learning curve.

Environmental: including, for example, the impacts of processes, products and services on air, water, land, biodiversity and human health.

Social: including workplace health and safety, employee retention, labour rights, child labour, community consultation, morale, wages and working conditions of staff in all operations.

For me the idea of the triple bottom line was first introduced to me when studying the pioneering work of the Body Shop. Here is a business that ‘walks the talk’ in undertaking regular independent reviews of their performance and knowledge in a range of areas including social and environmental performance and animal protection. For example, did the Body Shop deliver on its core values? Did they meet its goals in the protection of the environment and not lead to the harm of animals?

This initial discovery led me to uncover many European companies who are spending much more time ensuring a return of investment to customers, employees and trade unions, not just shareholders. Organizations such as Harley Davidson have successfully combined the profit motive with social responsibility and meaningful work. For more information visit the Business in the Community website at www.bitc.org.uk. There is also a host of businesses who have used the Balanced Score Card of Kaplan and Norton to help improve their capacity for a more sustainable future.

It is my view in the next decade I expect to see rapid increases in the area of reporting on the triple bottom line. Already in Northern Europe auditing the triple bottom line is fast becoming an expected business practice.

Seven levels of learning evaluation

Now that there has been some exploration on the intention and conduct of evaluation, it is time to give some structure to how you may go about specifically measuring the impact and quality of your learning and innovation in your business.

Let us explore a model of seven levels of learning evaluation. Starting with Donald Kirkpatrick who identified the first four levels of evaluation and, in more recent years, Jack Phillips who helped move the discussion to a higher plane (that is, the fifth level) of return on investment (ROI). From there two more levels will be suggested. The sixth is sustainability and the seventh is shared purpose. These help lift the exploration of results to include better examination of business governance and the triple bottom line.

This explanation begins with Kirpatrick’s work of levels 1 to 4, then proceeds to level 7.

Level 1: Reaction

This level measures individual reaction to a course or experience. This form of evaluation is typically the most common used in business, probably because it is perceived as the easiest to do. This form of evaluation is normally seen as an evaluation sheet at the end of a training course. Here we can discover whether a person had a good time and found it meaningful. This lowest form of evaluation can raise many questions rather than answers. For example, just because someone had a wonderful time does not necessarily mean that they learnt something valuable. The reaction method can also be used to evaluate on-the-job coaching and e-learning.

Level 2: Learning

Here attention shifts to what knowledge skills and attitudes have actually changed or have been acquired during an experience. Changes in learning are commonly determined with some combination of pre- and post-assessment as well as direct observation and testing. Sometimes this evaluation will resolve whether new knowledge or learning has been put to use but generally the discussion is quite shallow.

Level 3: Behaviour

Level 3 measures real change as a result of the initiative being undertaken. This normally involves direct observation of people’s performance on the job. For this level of evaluation to be successful it requires assessment which is accurate and unbiased. The assessors are normally the managers, coaches or mentors of the people actually performing the work. To do this well, training and good education on assessment is vital. A skilled assessor will note not only behavioural change, but also which factors might inhibit doing the job in the first place, for example, a lack of resources, unclear policy or some other hindering factor.

Level 4: Business results

This identifies how learning and knowledge is delivered to the business, and typically

involves assessment against measures such as productivity, customer retention, sales and profitability. Depending on the nature of your business, your interest in knowledge and in innovation, this measure will vary. In undertaking this evaluation care must be taken to separate those factors that have nothing to do with the initiative, for example, external pressures such as changed market conditions.

Level 5: Return on investment

Return on investment shows the cost versus the benefits of an initiative. In undertaking such a study you will discover the linkage between learning and improved profitability, efficiency and effectiveness. For example, did the dollar value of the produced benefits exceed the cost of hosting and setting up the initiative? Some creativity will be required to quantify the hard-to-measure competencies and capabilities. In most cases some measurement can be placed on the data you are receiving; the key is to be clear about the assumptions you are using. There are a number of ratios and metrics used. A simple measure recommended by Jack Phillips is Total benefit (in $) x 100ROI% = --------------------------- Total programme cost

Level 6: Sustainability

At this sixth level of evaluation we shift our attention to broader and more outward focused questions. For example, will the knowledge or learning help the business pass the test of time? Here the issue is not just the economics of learning and performance, but whether the capabilities and competencies being learnt are actually helping a business prepare for the future. We need to pay close attention to the context and environment of change and be receptive to new views of what excellence means. Businesses which invest in their people and systems, typically keep a close watch on their environment and will have a higher chance of measuring success here.

ROI% = Total benefit (in $) 100

Total programme cost

Level 7: Sharing the benefit

The highest and most altruistic level of evaluation is asking whether your business know-how is adding value and helping others, whether for your suppliers, customers, partners or society as a whole. As has been discussed previously, on the triple bottom line business is increasingly expected to be accountable for its actions and be a good corporate citizen not just for our current generation but for future ones as well. So, we must be prepared to have independent assessment as well as contribute to the quality of the life of others.

As a postscript to the seven levels of learning evaluation, the key to ensuring lasting success is to move up the hierarchy. If you are able to raise questions and stimulate conversations on the higher levels, you will most likely advance over time. Here are some examples of what people have said about actual knowledge and innovation initiatives:

‘Customers now feel they are not lost in the system.’

‘It has enabled peer support and best practice sharing.’

‘We now view problems from a common perspective.’

‘We are learning from both our successes and failures.’

‘We have a much better response to customer needs.’

‘There is much better communication and openness.’

Summary

Quality evaluation helps shape a stronger future through more honest assessment of and deeper thinking about results. To ensure lasting success in business, clear action must be taken to ensure that the generation of value is much broader than just achieving record profits and creating a nice public image. To do this there needs to be independent accountability and verification for social and environmental performance as well. The final mix of evaluation will depend on the nature of your operation and business. Depending on your hot issues and needs, you should use a balance of assessment to achieve the result you desire. If you explore higher levels of evaluation you will soon discover more profound insights such as greater longevity and shared benefit in what you are doing, while at the lower levels you may only discover what people feel about their learning. The key to success in evaluation is not to burden people with excessive demands but to ensure the right measures are explored for the right reason. Then your business will be better placed to face the future with confidence.

Chapter 15: Measuring Your Know-How

Overview

You can have all the buildings in the world but it needs people to make that dream a reality.

(Walt Disney)

Measuring your know-how requires:

deeper analysis of how talent generates value

creating forward-looking financial statements

discovering the best measures of knowledge and innovation

tracking performance over time

the desire to generate a more enlightened approach.

Meeting the new accounting challenge

There is an increased realization that traditional accounting methods are failing to measure the real impact of people on business. We see this on the stock market each day when businesses are valued by many times their financial book value.

Twenty years ago when a private sector business valued its wealth, it essentially meant the value of the price equalled the fixed assets, such as buildings, plant and machinery, in the balance sheet. Now we are seeing a dramatic shift in how worth is being judged. Starting with the remarkable case in 1995 when IBM bought Lotus for US$3.5 billion, fourteen times their book value. Marketplaces have come to place immense value on the value of intangible assets such as intellectual property and the know-how to speculate on the future of a business. We only have to observe how IBM has benefited from their investment in Lotus to understand how wise was their initial decision.

Oracle is another example of the value of know-how. Its shareholder value has been worth up to twenty-five times its book value (96 per cent for intangible assets and 4 per cent for tangible assets). Such judgement of perceived value indicates that the business community now places a much higher weight on people’s ingenuity and talent. Other point in time examples of the weight for intangible assets include Coca-Cola (95 per cent), Kelloggs (95 per cent) and IBM at 93 per cent.

Even Ford’s book value, with the organization’s massive balance sheet of tangible assets, only accounts for an average of around 35 per cent of its current market value. The remaining percentage balance is the perceived worth of its know-how. Then there are the many businesses and government operations which are not listed on the stock exchange; their perceived value to customers and the community is often seen to be much more than the cost of running them. People look at the perceived value they contribute to the society. For me, a classic example is the host of charities and voluntary organizations that have little or no fixed assets but provide a wonderful service to society.

The measurement of this so-called know-how factor has now become a huge preoccupation for business strategists across the world. It is worth noting upfront that currently there is no universal standard or agreement on how this measurement is to be done. The Saratoga Institute in the USA has developed over 250 metrics for what they call human capital. Karl-Erik Sveiby a pioneer in this field on his web site at www.sveiby.com.au has noted at least twenty-one different approaches to measuring intangible assets or intellectual capital. Given these conflicting opinions and debates on terminology, it will be no surprise to discover that accounting for know-how is not yet a part of normal business practice. McKinsey and Company in a study of thirty-three of Australia’s top companies found that only 25 per cent of them recognized the importance of intangible-wealth performance, preferring in most cases to see people as cost rather than wealth generators. However, the Swedish company, Skandia, has been producing reports on the net worth of their people for nearly a decade, so for them this discussion is nothing new.

What makes this field difficult and somewhat controversial is the problem in directly linking knowledge and innovation with better performance as factors such as good morale, customer relationships, branding and a smart learning culture are often very hard to place a value on. We know it is important, but how important? For example, when Ford bought

Jaguar it reduced the defect rate to 8 per cent of previous levels, but can Ford claim all this success or were there other factors affecting this astounding result.

Another example might be when a business decides to reduce costs by making forced redundancies. On the balance sheet such cost cutting may give a favourable result but how about the loss of talent, drop in morale and reduced customer loyalty? Will the decision have a direct or indirect impact on the long-term capability and viability of the business? Such questions are central to modern management’s desire to ensure lasting success through better reporting of the value of its knowledge.

Finding common ground

There are currently many accounting bodies and industry groups which research how intangible assets can be better recorded. This is leading to a profound shift in thinking in how undertake the annual reviews and forecasts. It was not long ago that using measures or indicators such as brands, customer lists and technology were seen as unthinkable. However, in the world of the digital-age company, such accounting and business reporting has become a business necessity.

In the next decade the reporting of so-called intangible assets will dramatically change the accounting landscape. For the first time investors and the public will have a greater opportunity to place a better measure on the true value and future of an enterprise. It will also provide internal decision-makers with data to improve cycles of knowledge and innovation.

We can already see this with Coca-Cola, whose brand equity and protection of its secret formula is valued in billions of dollars, or Merck who with clever investment in research and development is able to use its acquired insight to help grow competitive advantage. In the world of entertainment and hospitality organizations such as the Sydney Opera House, through their web site at www.sydneyoperahouse.com, smartly markets their intellectual property to improve customer loyalty and market share.

Of course, saying that intangible assets have a right and a place to be recorded is one thing but reaching agreement on how to do it is another. To help address this, the International Accounting Standards Board is working hard to achieve implementation in 2005 of new accounting reports. You may wish to visit www.iasb.org.uk for the latest. While the US Financial and Standards Board (FASB) has already said that measures of intangible values must be:

selected very carefully

displayed in a systematic and ordered way using matrixes or tables

used across a business or organization rather than in isolation

compared between periods of time and with other relevant organizations, divisions or industries

supported with explanatory notes to guide the reader through the material. Where old measures are no longer used and new ones are brought in, these should be explained.

The great dilemma for many experts is that placing value on talent and genius is seen as a very imprecise science and many of the measures and indicators are seen as unreliable. However, in saying this, relying only on traditional financial reporting is even more dangerous, particularly if we consider investments in our people, training, innovation, research and development are currently treated as costs within existing accounting methods.

As Wayne Upton Jr recommended in another study commissioned by the FASB, businesses should be required to produce records that demonstrate:

a recognition of intangible assets in financial statements and improved measures of those assets

an expanded and systematic use of non-financial performance metrics

an increased use of forward-looking information.

In noting the need for change, most accounting professionals and many industry observers are very cautious and not likely to suggest massive overnight change. To begin with businesses cannot toss out mandatory financial records and then duplicate this with another set of books that are unrealistic, unnecessary and unlawful. So, expect a phased and incremental introduction rather than a revolution during the next decade.

It must also be said that many managers are very hesitant about disclosing information to the public that could be used against them in the future. Others are very keen to share their story of how they are growing expertise, talent and know-how. As former chairperson of Lend Lease Corporation, Stuart Hornery, said at a symposium on measuring and reporting intellectual capital, ‘measuring intangible assets should be voluntary and should report on the matters that matter most to performance’.

When it comes to reporting intangible assets it is imperative these disclosures are true and accurate. We do not want another set of reports that have questionable integrity. As with traditional measurements of tangible assets, indicators, rations or measures of intangible value must be relevant, reliable, clear, comparable and verifiable providing a consistent basis of comparison from period to period.

Exploring sources of knowledge and innovation

When it comes to measuring know-how, no single metric or approach can meet all purposes. Specific measures or indicators are heavily influenced by the nature of operations that exist within each business. So expect variations!

For example, a marketing function in a business could use metrics like a loss of key accounts or churn rate in a year as a measure of the worth of their know-how. While another part of a business like the human resource function may disclose staff turnover as a measure. Other operations may see investment in research and development and list its major clients as far more meaningful. Again, these measures will vary tremendously between profit-driven and not-for-profit enterprises, and are highly idiosyncratic. Therefore, it is imperative that assumptions that drive business reporting are communicated loud and clear. In some cases managers may be immediately attracted to a measure of knowledge and innovation, while on other occasions they will need to shop around.

To help consolidate the general picture, here are the various universal approaches being used in business. These indicators, of course, supplement traditional measures such as profitability, productivity, goodwill and increased sales growth which are currently listed in private sector business accounts. In government, the measures of intangible assets could be provided based on other measures such as productivity gains, capital outlays and savings to help provide a picture of success in innovation and knowledge.

However, such blanket measures at best only give a quick impression; they can hardly be described as foolproof. It is, therefore, recommended that a series of measures be considered to help promote a more accurate and informative picture of your business landscape. Here are five areas commonly explored in existing reporting on intangible value:

Customer capital attempts to place a value on the nature and quality of customer relationships, customer satisfaction rates, growth of customer learning, and involvement and improvement in decision-making and consultation.

Human capital measures the current know-how of the people under its control. Jac Fitz-enz describes human capital as ‘that intellectual asset that goes home every night in the minds of employees’. A high level of enthusiasm, desire and commitment in the workplace would be an indicator that the human capital or available talent is working in your favour.

Intellectual capital comprises listings and perceived values of trade markets, secrets, patents and branding.

Relationship capital involves describing important strategic alliances, collaborative relationships, business partnerships, joint ventures and industry associations that could help build reputation and industry standing.

Systems performance explores how systems and processes directly or indirectly benefit or generate improved know-how. Measures can include investment in digital technology or how practices have been replicated or improved. Here you find measures of productivity, reduced wastage and efficiency savings, to name but a few.

Selecting your best measures

To assist in the use of suitable measures of intangible value Table 15.1 lists examples of metrics which are commonly appearing in reports. This list is general in nature and does not propose to be all-inclusive. It is designed to give you a sense of the area and a chance to explore choices. The goal here is to promote conversations in your business as to how you could better place the value of your know-how and improve your capacity and the power of your knowledge.

Table 15.1: Examples of intangible metrics

Customer capital

Agreements, contracts and permits

Average response rate to customers

Customer acquisition cost

Customer churn rates

Customer satisfaction

Customer yield

Listings and numbers of customers

Market share

On-line sales per day

Ratio of sales contacts to sales closed

Revenue percentage per customer

Repeat orders

Service awards

Share of new customers

Human capital

Average years of service

Brain drain – rate and cost of voluntary separations as a percentage of headcount

Employee satisfaction – percentage of employees scoring in top quartile of job satisfaction survey

Hiring cost

Expert turnover

Hours and $ investment of training/employees

Level and type of education

Literacy levels – percentage of key employees who have met competence standards

Number of employees

Proportion of support staff to the core business

Profitability per employee

Rookie ratio

Success of employee suggestion programmes

Staff morale – percentage of employees who indicate concerns with existing culture and climate

Staff turnover

Succession planning – percentage of key positions with at least one fully qualified person ready

Brand and internet domain names

Computer software and licences

Industry awards

Rights (for example, broadcasting or servicing agreements)

Patents, copyrights, franchises, trademarks (that is, perceived value)

Patents cited by others

Unpatented technology (for example, secret formulas)

Relationship capital

Business partnerships

Contract portfolio

Cross-functional teamwork – percentage of projects based on interdisciplinary collaboration

Knowledge-enhancing customers and suppliers

Projects being undertaken with others (colleagues, customers and idea groups)

Strategic alliances

Joint ventures

Systems performance

Administration expenses as a percentage of sales

Breakeven time for new product or service development

Cash flow

Cycle times to process services or products

Knowledge reuse hits from learning archives or databases

Investment in IT or knowledge management systems

New product introductions

On-time delivery

Productivity gain due to new ideas or equipment

The metrics in Table 15.1 have been chosen because it was felt that they need very little or no explanation. The goal here is get you thinking and to explore a wider range of options. Where I found measures very specialized to a particular business or industry, I have left them out. You will also find that some metrics could be listed under a different category depending on your point of view. However, my role here is not to pass any moral or intellectual judgement on their usefulness or categorization but these measures are in use and you might wish to consider some of them in your reporting processes.

The listing of intangible asset measures in Table 15.1 comes from a variety of sources including work by Karl-Eric Sveiby, Jac Fitz-enz, the Saratoga Institute, the US Financial Accounting Standards Board, Kaplan and Norton, Skandia AF and the Danish Agency for Development of Trade and Industry.

As a supplementary comment to Table 15.1, please do not see this listing as complete but go out and discover more for yourself. Like me, you will find it fascinating to see the degree of inconsistency across industries not only between businesses but also, and more alarmingly, between divisions or work locations within the same operation.

For example, where you would expect to find a measure to be used in different parts of a business they often are not and are substituted with another measure. Such inconsistency does not help the cause for improving the case of better reporting. It does on occasion raise more questions than answers. Are the claims being made purely idiosyncratic or are they just self-promotional or, worse still, a misrepresentation of the truth? I suppose when we can track performance over time we will have a better gauge of its true performance in improving knowledge and innovation.

Research and development expenditure and percentage directly involved

Quarterly sales growth

Sales generated from new products and services

Time to completion of new products

Unit cost for manufacturer or service delivery

Clearing the fog

Without a doubt, the area of measuring know-how is undergoing fundamental change. For some the pace of reform is too slow, while for others it is a very scary proposition. This has led to an intense debate on the perceived and actual value of specific measures.

I recently attended a talk on this topic and the conversation became very heated. One area of contention was how to place a value on the notion of a corporate or business culture. The presenter, who was an accountant, argued that business culture was not an asset, it cannot be controlled and owned, so placing a value on its perceived worth was meaningless. Others in the audience took another view. They argued that the attitudes of staff and how they feel towards the business and its customers must be reported on. They argued that a so-called bad culture has a debilitating effect on knowledge and innovation in any business or team. In that situation everything in a business becomes difficult. Not surprising they felt efforts must be taken to measure the culture of a business.

Similarly, clearing the fog of measure does not stop there. For example, what is the benefit of putting a dollar value on a patent if the person who was primarily involved in its development leaves the organization, especially if a business has not captured their insights and knowledge before they left?

As you can see, clearing the fog on measuring know-how is not an easy task and it can raise more questions than answers. However, it is time for managers to search and trial different measures. As long as this is done in an accurate and truthful way, we will benefit. Particularly if accountability is high and the business looks to generate a more enlightened approach.

Sit back and watch as the debate on placing a better value on knowledge and innovation is explored in the decade ahead. This topic will be firmly on the agenda for many years to come. However, managers cannot afford to wait and need to deploy a range of measures that go beyond just reporting. We need to mine out what knowledge is vital and why, then stimulate methods, tools and systems to make it easier to succeed. We may not be able to totally clear the fog on how to measure know-how but we can improve the level of awareness and inquiry on how know-how adds value.

Summary

In the knowledge era, business can no longer measure its performance and future purely on traditional financial reports. What is required is a fresh approach to exploring how knowledge fuels business success. With this in mind it is vital that each business asks and explores how its know-how is creating value. For example, what is the current standing in how a business relates to its customers? How successful is the business in stimulating a healthy learning culture while protecting its intellectual property? Is a business able to build systems and processes it requires to foster improved innovation and service delivery? Such questions are central to ensuring lasting success. Only when these types of conversations and reporting become second nature will there be a formula for long-term growth, renewal and inspiration.

Chapter 16: Passing the Final Test

Overview

The dynamic principle of fantasy at play . . . belongs to the child, and as such appears to be inconsistent with the principles of serious work. But without this playing with fantasy, no creative work has ever yet come to birth.

(Carl Jung)

Passing the final test requires:

being a magnet for learning

questioning our self-talk and inner dialogue

removing our ego from the equation

being aware of our arrogance and overconfidence

rediscovering the spirit of play at work.

Coming back to basics

At the beginning of Chapter 1, we started with two vital questions: what makes a truly outstanding business, and what capabilities does a business generate that makes it extra-ordinary and very hard to copy? Over the fifteen chapters many suggestions have been made to help you answer these questions.

Whatever your reflections and feelings, this journey will have to continue in order to make the progress you require. In fact, when we stop asking these questions it is likely that we have lost the focus we need to run a successful business or build a better career. So place them firmly on the agenda and use them as a reference point to position and increase the power of your knowledge.

If we were to take a poll on the major theme of this book, my sense is

that many basic ideas would come to mind. Here are seven that were in my thoughts as I wrote this book:

collaboration

compelling vision

digital technology

deeper learning

flow

safe space

review.

Of course, depending on your needs and experience there may be many other themes that jumped out for you. In this regard I am most interested to hear and discuss your thoughts and conclusions. I would strongly encourage you to contact me at www.alastairrylatt.com and share with me your ideas at any time. I will do my best to reply within a few days.

As we reach the final pages it is imperative that we again remind ourselves of some key messages. First, if we wish to win the knowledge game we must have a very clear reason for our learning. We need to understand why we are bothering to develop our capabilities, while also understanding who else will stand to benefit. Our dreams, goals and intentions are drivers that maintain our curiosity and passion. Whether it is establishing learning goals or mapping out a plan for a business, such focus can never be undervalued. It is the impetus that guides us and motivates us.

Having explored focus and motivation, managers can then shift their attention to improving systems, programmes and processes. In business this means championing practical ways for people to exchange, store and share vital insight and innovation. For this to happen there must be simple and clearly understood ways for people to contribute and innovate. With this attitude a business will be off to a flying start, not because it can control and package the knowledge generated, but because it will be feeding and nurturing a

learning process that is resilient, adaptive and enduring.

Remember, be a magnet for learning. Radiate your brilliance not on how much you know but by creating a climate for others to show their genius. Secure lasting success by creating openness, receptivity and a curious nature. Foster a spirit that sees wisdom in various people, places and forms while allowing others to do the same. Nurture the learning that you have at your disposal. Know when to enlighten and stimulate but also when to give ample space and opportunity to grow. Be aware of those people who stifle learning and knowledge, and remind them of their responsibilities, while clearly understanding why they see the world as they do. Then work towards building a shared commitment to a better and exciting future.

As in any game, success rarely happens overnight, you need to be in it for the long haul. If you reach a hurdle or are confused, avoid becoming paralysed. See the creative tension as a new opportunity to share ideas and build better understanding. Be prepared to review your plans and vision and to make modifications. The fact is in life that breaking new ground is rarely achieved in a zone of familiarity and comfort. Most often quantum leaps in learning occur when we are forced or choose to do something new or different, leading to new behaviours, assumptions and mental models.

Of course, winning the knowledge game cannot be sustained in an atmosphere of fear and compliance. Managers need to inspire confidence, learn from mistakes and celebrate success to progress. We also need to be grateful of our strengths and the gifts we bring, as well as having a healthy approach to self-improvement and growth.

From experience being able to work and learn together is far more important than any financial, technical or technological solution. We need to connect emotionally, intellectually and spiritually if we are to grow and succeed. Businesses, and more specifically managers, are notoriously bad at managing relationships. It is very easy to have a healthy relationship when things are rosy and times are good but when things take a turn for the worse the real test begins.

In business as in life, relationship skills should never be assumed, they must be developed and worked on. It is not so much that people do not have the technical skills, it is that they do not have the desire or the ability to get on with each other. People need to discuss more rigorously how they can work better together by building a more shared and worthwhile purpose. All too often businesses’ visions and plans fail to connect with the values and hopes of their people. If only they spent a little more time forming relationships the potential for teamwork, shared commitment and learning would be so much greater. No level of business acumen will help you if you are unable to generate trust and mutual advantage.

Listening to our instinct

Life ’s challenges constantly stoke up a fire of emotions and thoughts. At times we feel in control and happy, and at other times we may feel vulnerable, alone or angry. How we respond to our state of mind and how we process our own inner thoughts is where the knowledge game is eventually won or lost.

In saying this, I am not suggesting you undertake some mind control training or rush off and see a psychiatrist, but I am suggesting that you develop the skill to tune into your mind and instinct more. Our job is not to fight a war against the gods and monsters of the mind but to take more liberties in how we can learn and respond to what our minds may be saying.

For me, it is here that the final test of winning the knowledge game needs to be undertaken and understood. We need to cast away those rogue thoughts and delusions that are causing us harm, even when on the surface the intentions may be very positive and enticing. Similarly we need to recognize the power of our intuition and gut feeling. At times our instinct is wrong but more often than not our inner wisdom is fairly close or there is a hidden issue that needs exploring.

Listening to our instincts requires us to understand that our minds are a blending of both conscious and subconscious activity. Scientific research has shown that we have a complex array of different neurological, hormonal and electromagnetic information. In each moment of time we are trying to interpret what is going on around us. Sometimes we may check into our inner dialogue or self-talk to help us, but most of the time our mind is clearly making decisions without consulting us.

As neuro-psychologist, Richard Gregory, explains most of our mental functioning is done without us ever being aware of it. He gives the following analogy:

Imagine consciousness is a beam of light, from a torch directed around the dark universe of the mind. We are the beam of light, we are an eye looking along the beam, and we see nothing outside. But there is a great deal around it and much that is never illuminated. All this is Mind. Present consciousness is what we see lit by the patch of light of the beam.

Further studies by Professor Benjamin Libet and Dr Patrick Haggard found that our subconscious always starts with a whole series of electrical activity before we respond or act consciously. On average this takes between a half to a quarter of a second to process.

So, in a real sense we are always living in the past and a great deal of our thinking, emotional juggling and judgements are made before we even get the urge to do something. All this mental activity in our mind is our personal attempt to deal with complexity and this helps us to think in a single and coherent way. So we should not see our conscious thinking and feeling as our whole mind, it clearly is not.

Professor Michael Gazzaniga proposes that our inner voice, what we sometimes label our conscious mind, comes only from the left side of our brain. This left side of our brain tries to make meaning and explanation from the various events and emotions we are experiencing. In fact, the left side of the brain looks for order and reason even when none

exists. This leads to overgeneralization, mistakes and errors.

As Gazzaniga explains, the left side of our brain sings like Pavarotti while the right side is like a bird chirping in the background. He goes on to say that the feeling of being in control of our lives is just an illusion. The urge to do something does not come from conscious thought but starts with the electrical energy between the billions of neurons and pathways in our subconscious mind. The vast majority of what we are doing is never in our awareness. In fact, if you try to be aware of what you are doing you will fail. Your conscious mind does not have a hope of managing the complexity of such an activity. It is all being done for us without us thinking about it. The next time you are walking down the street try to manage the complexity of what you are doing. For people who have had to learn to walk again after an accident or illness, managing this using conscious thought is a difficult task.

Given these findings, it is not surprising that people have for thousands of years sought better ways to increase the awareness of their mind. Such an enquiry is vital if we wish to address the problems and complexities of life and find different connections and choices.

The same message applies to business. We can never hope to make total sense of our know-how as it often lies hidden and out of reach. The best we can do is to create a spirit of learning, which encourages risk-taking, deeper thinking and experimentation. Therefore, whatever happens to us in business we have an attitude that will carry us through.

Dealing with our ego

Each of us has an ego, a part of our psyche that desperately wants to help us. We probably cannot go an hour without our ego making judgements for us, whether it is accepting praise or choosing to tune out when we are in danger of hearing something that may upset us.

I recently had to give a talk on the topic of ‘ego-less leadership’ and for two weeks leading up to this talk I really noticed how my ego was affecting my life. It was a fascinating experience and I must say it changed me for ever. I discovered how quickly my ego hijacked my learning and thinking, even when it was not in my best interest to do so. In doing my research I came across a quote from Alan Watts that helped shape my thinking for this presentation. He said in 1966 in The Book on the Taboo against Knowing Who You Are, that we have created a false illusion of a human being and are aware of ourselves as only ego inside ‘bags of skin’.

The problem with an ego is that it can stop us from discovering important lessons in life. The first point is that we choose to be hurt when someone confronts our point of view or questions what we are doing. Often our natural response is to become defensive and not hear the feedback. This personalization also extends to good news when we can gloat over what nice things are being said about us. The real test is to remove ourselves from the equation and discover the important lessons that lie behind the feedback we are receiving.

I noticed this again when I attended a training session by an expert in knowledge management. Although the content was marvellous, it was obvious that many of the participants had some difficulty coming to terms with the material. Instead of using the resistance as an opportunity to learn more, the presenter chose to bulldoze on and present his material regardless. During the lunch break when I brought this to his attention, his ego took over and he disregarded my feedback. He clearly wanted to be seen as an expert and as the holder of all wisdom, and was not prepared to compromise his approach. Then as the training session progressed into the afternoon, a clear polarization of learners began to surface. Some people, of course, felt the style and delivery was satisfactory but others felt quite alienated and frustrated. The real shame was that the ego of the presenter had got in the way. Had he demonstrated greater flexibility most likely the outcome from the training course would have been a lot better for more people.

This story leads to the second point, that our ego can paralyse our thinking and we can become attached to an idea, opinion or outcome. If our view is questioned or attacked we can choose to be hostile or wounded. Again such blocking and filtering does not help us to grow. We need to allow ourselves the freedom to hear and discuss a diverse range of opinions and not let our ego take a premature exit from what is being discussed.

We commonly see how ego wants to win out when people fall into a trap of ‘if only’ thinking. For example, ‘if only’ this person would agree with me, or ‘if only’ someone understood. Such craving or attachment is directly related to our ego’s desire to control. We often see this when managers try to lead or coach their staff, resulting in a style that is more about telling and compliance rather than exploring different avenues and viewpoints. The sad consequences are often an impasse where nobody wins or progresses.

In business a common cause of failure is arrogance. People fall into the trap of being too

confident about their ability or too caught up in their success. This includes an attitude of invincibility leading to a serious loss of rapport with customers, staff and the marketplace. This ego-driven arrogance has enormous repercussions in winning the knowledge game and business success. If you feel you know everything it is very difficult to make progress. As John Matthews, a consultant in executive coaching, reminded me recently, if someone is sleeping you can wake them up, but if they are pretending to sleep you will never wake them up.

So what should you do about arrogance? As a general principle we must always seek to improve, irrespective of how well you feel you are doing. It is only then that you will have the openness of mind to discover new perspective and learn from your mistakes. To help you avoid arrogance consider the following five points:

Hold a six monthly review of your strengths, weaknesses, opportunities and threats.

Assume your competitors are clever and competent.

Listen and take action based on regular consultation with customers and key partners such as staff, managers and trade unions.

Undertake regular industry visits and attend conferences to discover new insights.

Read widely and learn broadly.

Of course, our ego is only half the equation. We have to adapt to other people’s egos as well! We must understand where our ego is a factor as well as the other person’s. We need to have trust and faith in the process of listening and sharing knowledge. This personal commitment of two-way rapport is essential if we are to be successful in passing the final test of winning the knowledge game.

Here are seven tips to help get past the hidden tiger of our ego:

Rapport is everything! Get to know the other person’s story and needs first.

Paraphrase not only what they are saying, but how they might be feeling and thinking.

Confirm common ground and areas of acceptance. Issues are rarely black and white, so be prepared to be surprised.

Offer to help them by providing better information, resources or tools.

Use neutral language without laying blame. Give feedback without upsetting or overly gratifying the ego.

Clarify your views and feelings. Ask them to repeat back what you have said and how you might be feeling.

Always thank them for granting you the opportunity to have the conversation.

Living a simple game plan

No doubt winning the knowledge game is a major challenge in modern business. One could also reasonably argue that it has always been our challenge. However, the twenty-first century world of the superhighway and the knowledge worker places enormous pressure and expectation on us.

I would liken the challenge of trying to keep up to date in this field as like pouring sand over your outreached palm. Sometimes you may be lucky and some of it sticks but often it just falls away. The key is to live a game plan that enables you to deal with such volumes and complexity and achieve a good outcome.

Three practical questions have helped me on this journey and may help you:

Who am I?

What do I stand for?

Where am I going?

In business you might ask:

What is our mission?

What do we stand for?

Where are we going?

For me, these questions provide the glue for achieving greater meaning and purpose in life as well as helping achieve excellence and success in business. This is not because these questions are especially clever or new but because it gives us the chance to shape our dreams and to be an active participant in achieving our goals in whatever form they might take.

See winning the knowledge game as something that goes beyond learning the latest, the best or achieving the next target. See it as our way of rediscovering the spirit we need to maintain the fun in our lives, whether it is at home or at work.

Take every opportunity to explore the wonder of learning, whether by reading a new book, playing in the park or tasting a new food. Love what you do and be prepared to find new ways of looking at the world.

Question the so-called truth, go out and test your assumptions and question your intuition. Be prepared to try the untested, the unknown and discover more.

Turn off the television, engage your senses, take on new challenges, stretch your comfort zone and reclaim what it means to be you.

Summary

The ultimate skill in winning the knowledge game is in building a clear and uncluttered mind that is more receptive to the experiences we face. To do this we need to realize that our conscious thoughts are only a fraction of our mind’s activity and we are really at the mercy of our subconscious. By beginning a regular daily practice of noticing our self-talk and ego, we are well on the way to a path of greater personal growth and development. It is here where the knowledge game needs to be won for us to succeed. If we can explore how our mind works and how it impacts our view of the world, we are wonderfully placed to achieve lasting success in whatever we might do.

List of Tables

Chapter 9: Sustaining and Keeping Talent

Table 9.1: Fifty talent-building ideas

Chapter 10: Protecting Intellectual Property

Table 10.1: Intellectual property--help desk

Chapter 12: Increasing Customer Loyalty

Table 12.1: What the latest consumer trends research tells us

Table 12.2: Glossary--customer support and technology

Chapter 13: Polishing Your Training Performance

Table 13.1: Digital learning--glossary

Chapter 15: Measuring Your Know-How

Table 15.1: Examples of intangible metrics